Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.

Walsall Corporation Bill,

As amended, to be considered To-morrow.

Wolverhampton Corporation Bill,

As amended, considered; to be read the Third time.

Oral Answers to Questions — INDIA.

BOMBAY MURDER SENTENCES.

Colonel DAY: 3.
asked the Under-Secretary of State for India whether his attention has been drawn to a case in which the sentence of death was passed
on three persons and transportation on four others on conviction of murder, and also of wounding Mumtaz Begum; and whether all those implicated in this case have been brought to trial?

The UNDER-SECRETARY of STATE for INDIA (Earl Winterton): I would refer the hon. and gallant Member to the reply which I gave to the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy) on 11th June.

Colonel DAY: Will those who inspired the outrages be brought to justice, irrespective of their position?

Earl WINTERTON: The hon. Member is really repeating his question. I will read the answer which, as stated, I gave to the hon. and gallant Member for Central Hull (Lieut.-Commander Ken-worthy). I said that I had received reports, and that if any further inquiries be considered necessary, these will in due course be made.

KABUL (BRITISH LEGATION).

Mr. DALTON: 7.
asked the Under-Secretary of State for India for what reason, or on what principle, the expenses of the British Legation at Kabul are paid for wholly out of Indian and not out of British revenues?

Earl WINTERTON: Until recently Afghanistan was in relations with the Government of India only, and the cost of representation at Kabul was naturally met from Indian revenues. Although direct diplomatic relations between Afghanistan and Great Britain have now been established, India is still vitally interested in them, and no revision of the incidence of expenditure has hitherto been considered to be called for.

Mr. THURTLE: Is such a revision contemplated in the incidence of the expense of Kabul in the near future?

Earl WINTERTON: No, Sir. There is no contemplated alteration of the existing arrangement.

Mr. DALTON: Is not the British Government as deeply interested in relation to Afghanistan as in relation to other countries where we have to pay the costs of Consuls?

Earl WINTERTON: I must ask for notice of that question. I am more concerned with the matter from the Indian point of view.

NEPAL.

Mr. DALTON: 8.
asked the Under-Secretary of State for India what subsidy, if any, is paid by the British Government to the Maharajah of Nepal; and, if so, for what reason?

Earl WINTERTON: An annual present of 10 lakhs of rupees is made to Nepal by the Government of India, as a mark of their high appreciation of the assistance rendered by Nepal during the War.

MOTILAL GHOSE LIBRARY (POLICE SEARCH).

Mr. SNELL: 9.
asked the Under-Secretary of State for India if he can state the reason for the recent raid by officers of the Criminal Investigation Department on the Motilal Ghose Library in South Calcutta?

Earl WINTERTON: No, Sir. We do not receive in this country statements of the reasons for every warrant for search issued to the police in India.

Mr. SNELL: Is the Noble Lord aware that out of twelve volumes seized on this occasion, eleven have been returned as not being out of order, and no action has been taken in regard to them?

Earl WINTERTON: No, I am not aware of the facts, because they do not come under my immediate cognisance or that of the Secretary of State. They are matters usually dealt with by the local authorities in India.

NORTH-WESTERN RAILWAY OF INDIA.

Mr. SNELL: 10.
asked the Under-Secretary of State for India whether the Railway Board in India has ascertained the causes of the strike that has been dislocating traffic on the North-Western Railway of India for more than a month; if so, what steps it has taken towards bringing about a settlement of the dispute; and, if not, whether the Government of India proposes to demand a full report on the strike from the Railway Board?

Mr. D. GRENFELL: 13.
asked the Under-Secretary of State for India whether he is aware that the strike on the North-Western Railway of India has been going on for same months, and that 20,000 railway workers are involved; whether the Government of India has received a request from the Federation of the All-India Railwaymen's Unions for the immediate appointment of a conciliation board to bring about an equitable settlement; and what steps the Government of India propose to take?

Earl WINTERTON: I will answer these questions together. The Government of India have stated that the strike originated in the dismissal of a fitter for disobedience to orders, and it has been disavowed by the recognised Trades Union. I am not aware what steps, if any, the Government of India propose to take, but my Noble Friend is confident that the matter may safely be left in their hands.

Mr. MORGAN JONES: 22.
asked the Under-Secretary of State for India whether he is aware that, of the 40 mistries and workmen retired from service in the Bengal and North-Western Railway workshops during last January, only three or four men have received the gratuities due to them, the remainder having been told, after waiting more than four months, that there have been breaks in their services or that they have not served long enough to be eligible for gratuities; and whether the Government
of India is prepared to make rules by which no railway may be able to evade its responsibilities in this way?

Earl WINTERTON: I have no information, but if the men referred to are not eligible for gratuities under the rules, I see no ground for questioning the action of the Bengal and North-Western Railway Company in refusing to grant them.

GOVERNMENT ACCOUNTS (AUDIT APPROPRIATION REPORT).

Mr. GRENFELL: 11.
asked the Under-Secretary of State for India if he can state the reason for the change in the publication of the Audit Appropriation Report of the Accounts of the Government of India which formerly appeared priced at four annas as an annual supplement to the "Gazette of India," and related to all the provinces of India, but which is now published in a series of pamphlets by the different provincial governments; and whether, in view of the additional cost, he will consider a return to the original custom?

Earl WINTERTON: The change arises from the separation of central and provincial finance under the reforms scheme. As each provincial report has to be dealt with by the Public Accounts Committee of the Province concerned, a reversion to a consolidated form of report would be inconvenient and unsuitable, and would also, in view of the increased volume of the reports, entail greater expense.

PUBLIC WORKS DEPARTMENT (STAFF).

Mr. GRENFELL: 12.
asked the Under-Secretary of State for India if he will inquire into the case of the temporary sub-divisional clerks of the Public Works Department, some of whom are still after 15 to 20 years' continuous service drawing wages of from Rs.40 to Rs.45 per mensem; whether the Committee set up in 1921 made any recommendation on this matter; what action the Government propose to take; and whether the Government propose to continue their employment on a temporary or a permanent basis?

Sir HENRY CRAIK: On a point of Order. You are aware, Mr. Speaker, of the decision given by your predecessor with regard to questions relating to the
Government of India. Important and leading questions, your predecessor held, might be brought before this House, but is it in order, or is it consistent with the measure of self-government that we have endeavoured to give to India, that questions of detail such as are dealt with in this question should be raised in this House? Are they not better left to the responsible Government of India?

Mr. SPEAKER: I adhere strictly to what my predecessor said on that matter. It is difficult sometimes exactly to draw the line between questions of policy, which would rightly be discussed on the salary of the Secretary of State, and minor questions. I have observed a tendency to put in this House questions which have already been put in the National or in one of the Provincial Assemblies of India. I ask hon. Members to remember that we have delegated certain powers in India, and to use their discretion in accordance with the general rule.

Sir H. CRAIK: I would urge hon. Members, if they wish independence granted to India, if they wish this Protectorate—. [HON. MEMBERS: "Order, Order!"]

Mr. THURTLE: Arising out of the point of Order and the reply, is it not now a fact that, so far as Bengal is concerned, there is no independence of Government whatever?

Mr. SPEAKER: I can only repeat that I must ask hon. Members, in drafting their questions to Ministers, to remember the large constitutional questions of the Empire.

Earl WINTERTON: Under the Government of India Act "Public Works" is a Transferred Provincial subject, and the Governor of each Province, acting with his Ministers, has full power to determine the conditions of service of the clerks in its Public Works Department. My Noble Friend, therefore, is not in a position to interfere even if he desired to do so.

LEAVE OF ABSENCE ACT.

Mr. THURTLE: 14.
asked the Under-Secretary of State for India whether he can state how many governors or other officials have been granted leave under the recent Leave of Absence Act; and what additional expense has been thrown on the Indian Exchequer in consequence?

Earl WINTERTON: Leave has been granted under the Government of India (Leave of Absence) Act, 1924, to the Governor-General the late Commander-in-Chief, the Governors of Assam, Bihar and Orissa and Burma and three Members of Executive Councils, eight persons in all. The additional expenditure from Indian revenues, taking the rupee at 1s. 6d., is in a round figure £11,600, or rather more if account is taken of the cost of return passages for two military officers accompanying Lord Reading and one who accompanied the late Lord Rawlinson as Aides-de-Camp.

MANDALAY GAOL.

Mr. THURTLE: 15.
asked the Under-Secretary of State for India whether he will cause inquiries to be made in the ease of Srijut Satyendra Chandra Mitra, M.L.C., who, on 8th May, 1925, was reported to be suffering from ill-health in Mandalay Gaol; and whether, in view of the heat and lack of adequate medical attention at this prison, he will cause him to be transferred to a more healthy station?

Earl WINTERTON: The report referred to in my answer of Tuesday last indicated that the individual cases of ill-health were being carefully treated, and that the medical attendance was quite adequate.

BURMA (PROPOSED LEGISLATION).

Mr. THURTLE: 18.
asked the Under-Secretary of State for India whether ho is aware that a Government Bill has been brought forward in the Burma Legislative Council, called the Burma Sea Passengers Bill, whereby a tax is imposed on persons entering Burma by sea; and another Bill, called the Expulsion, of Offenders Bill, whereby any person convicted of a trivial offence can be deported from Burma; and whether he will give instructions that sanction to these Bills be refused?

Earl WINTERTON: The Bills referred to have been published in the Burma Gazette, and according to the procedure laid down in the Government of India Act, authentic copies of them, if passed, will be sent to the Secretary of State. My Noble Friend is not prepared to anticipate any decision on them which he may then feel called upon to take.

SECONDARY EDUCATION (GRANTS).

Mr. MORGAN JONES: 20.
asked the Under-Secretary of State for India, whether his attention has been drawn to the recent circular of the Education Department of India; whether he is aware that, whereas a grant of three lakhs of rupees was voted for the improvement in pay and prospects of the teachers in non-Government secondary schools, this grant-inlaid is now being refused to those schools which have not raised their fees to a prescribed standard; and whether, in view of the fact that this procedure penalises those whose work is to teach children of the poorest classes, he will take steps to have this anomaly remedied?

Earl WINTERTON: I am unable to identify the circular to which the hon. Member refers. If he will furnish further particulars I will look into the matter, but I would point out that education is now a transferred subject, under the control of the Governors of Provinces acting with their Ministers, and there are consequently Education Departments in each Province.

Mr. THURTLE: Does that answer apply to Bengal?

Earl WINTERTON: The answer applies to all the Provinces in which education is a transferred subject, and education was a transferred subject, though at this moment in Bengal there is a re-transfer. It applies to all the other Provinces.

SJ. BHUPATI MATUMDAR.

Mr. MORGAN JONES: 21.
asked the Under-Secretary of State for India whether he is aware of the fact that in spite of a recommendation to the contrary by the civil surgeon of Midnapur, Sj. Bhupati Matumdar has been re-transferred to the central gaol at Midnapur from the central gaol at Alipore, where he had been undergoing a medical operation; and whether he will cause the advice of the civil surgeon to be acted on for the benefit of the prisoner's health?

Earl WINTERTON: No, Sir. Reports on such matters are not made to the Secretary of State, and he is not prepared to interfere.

SINGAPORE (HOUSING AND SANITATION).

Mr. CECIL WILSON: 23.
asked the Secretary of State for the Colonies whether the comprehensive Report from the Governor of Singapore in regard to improvement in housing and sanitary conditions and the amount spent on improvements has yet been received, or when it may be expected?

The UNDER-SECRETARY of STATE for the COLONIES (Mr. Ormsby-Gore): No, Sir; I have not yet received from the Governor of the Straits Settlements the comprehensive report on the matters mentioned in this question. The hon. Member will doubtless recollect that I informed him on the 2nd March last that I would communicate further with him as soon as the Report was received.

Mr. WILSON: 24.
also asked the Secretary of State for the Colonies whether the Report of the Governor of Singapore in regard to the Commission of 1917, and the action taken thereon and its effect, has yet been received or when it may be expected?

Mr. ORMSBY-GORE: No, Sir; the Report referred to by the hon. Member has not yet been received. I expect, however, to receive it at an early date.

INSECT PLAGUES (PARASITES).

Mr. CADOGAN: 25.
asked the Secretary of State for the Colonies whether he has any information showing that the experiment of breeding beneficial parasites with a view to fighting insect plagues in our overseas Dominions has proved a success?

Mr. ORMSBY-GORE: Yes, Sir. I understand from the director of the Imperial Bureau of Entomology that, during the 18 months in which this experiment was being carried out, two successful introductions of beneficial parasites were effected, namely a parasite of the pear-slug, which is causing serious damage to orchards in New Zealand, and a parasite which was introduced from Nyasaland into Nigeria with a view to control of Glossina tachinoides, a species of tsetse fly prevalent in Nigeria. Two parasites of the earwig have also been introduced into New Zealand, but, owing
to difficulties in rearing them in the laboratory there, the strains have died out. Unfortunately, this work had to be suspended, but it is hoped to resume it shortly.

Mr. P. HARRIS: Will the benefit of any of these parasites be available in this country to fight our insect pests?

Mr. ORMSBY-GORE: The Imperial Bureau is meeting at this moment representatives from all parts of the Empire and from this country, and co-ordinating the work of research in matters of this kind.

Oral Answers to Questions — PALESTINE.

ELECTRIC POWER CONCESSIONS.

Colonel PERKINS: 27.
asked the Secretary of State for the Colonies whether he can state the present position of the Ruthenburg concession; whether any deadlock has arisen in the execution of this concession and, if so, what it is; and whether he is aware that local opinion is in favour of the harnessing of the water power of the Oudja being carried out?

Mr. ORMSBY-GORE: The Palestine Electric Corporation concession has now been put in a final form. No deadlock has arisen, but one or two minor points which it was not possible to foresee when the concession was originally drafted are still under discussion. The last part of the question refers to the Jaffa Electric Company's concession. Power is at present being supplied from a fuel station. Whether it shall ultimately be supplied from a special hydro-electric station on the Oudja, as was originally contemplated, or from the Jordan power house, has not been decided. The decision will be determined by technical consideration.

TOWNSHIPS (MUNICIPAL UNION).

Captain WATERHOUSE: 33.
asked the Secretary of State for the Colonies if the Palestinian townships of Rechoboth, Rishon le Zion, Tel Aviv, Petach Tikvah, and Cederah have been, with the sanction of the High Commissioner, formed into one Jewish municipal union; and, if so, if their governing body will be nominated by the High Commissioner or elected by the inhabitants?

Mr. ORMSBY-GORE: The reply to the first part of the question is in the negative. The second part, therefore, does not arise.

Oral Answers to Questions — IRAQ (BRITISH IMPORTS).

Lieut.-Commander KENWORTHY: 31.
asked the Secretary of State for the Colonies what proportion of the 33.17 per cent. of the imports into Iraq, stated to be from the United Kingdom, consist of Government stores for the use of the British forces in Iraq, and what proportion is for the canteens supplying Government offices and officials?

Mr. ORMSBY-GORE: I am not in possession of sufficiently detailed information to enable me to reply to this question. The High Commissioner for Iraq is being consulted, and I will inform the hon. and gallant Member when the information is available.

Lieut.-Commander KENWORTHY: Can the hon. Gentleman state whether this 33.17 per cent. did include imported Government stores? Has he that information?

Mr. ORMSBY-GORE: I cannot state definitely at the moment, but I do not think so.

Oral Answers to Questions — RHODESIA (TATI CONCESSION).

Mr. SNELL: 32.
asked the Secretary of State for the Colonies if he can state the position of the Tati concession regarding the question of becoming incorporated with Rhodesia; whether a referendum has recently been taken; and with what result?

Mr. ORMSBY-GORE: Resolutions were passed at various meetings of settlers held in the Tati district last January expressing the view that the time had arrived for proceeding further with the question of the incorporation of the district in Southern Rhodesia and proposing that, if such incorporation was approved by His Majesty's Government, the final decision of the European people of the district should be given by means of a referendum. The resolution has received very careful consideration, but the only reply my right hon. Friend felt able to make was that the terms of the
resolution had been noted and would be kept in mind, but that His Majesty's Government did not feel able in existing circumstances to take any immediate action in the matter. This decision was communicated also to the Government of Southern Rhodesia. It will be seen therefore that no referendum has been taken.

Oral Answers to Questions — STRAITS SETTLEMENTS (VENEREAL DISEASE).

Mr. PETHICK-LAWRENCE: 34.
asked the Secretary of State for the Colonies whether the Legislative Council of the Straits Settlements has submitted to him a draft Bill embodying any of the proposals of the Committee appointed to investigate the spread of venereal disease in the Straits Settlements which recommended in favour of the licensing and registration of all brothels by a Government official to be called the Controller, and the submission to a weekly medical examination of all prostitutes; and what action he proposes to take in the matter?

Mr. ORMSBY-GORE: I have received from the Governor of the Straits Settlements a draft Bill which embodies the proposals of the Committee referred to by the hon. Member. The Bill has been under consideration by the Advisory Committee on Social Hygiene, and I am now awaiting their Report.

Oral Answers to Questions — EAST AFRICA (DEVELOPMENT LOAN).

Sir WALTER de FRECE: 38.
asked the Secretary of State for the Colonies the intentions of the Government with regard to the suggested loan for East African development?

Mr. ORMSBY-GORE: I would refer the hon. Member to the reply given on the 10th of June to the hon. Member for West Walthamstow (Major Crawfurd).

Oral Answers to Questions — COTTON (EMPIRE CULTIVATION).

Mr. SANDEMAN: 36.
asked the Secretary of State for the Colonies what the percentage increase of acres under cultivation of cotton in British Possessions and Protectorates has been, comparing 1919 with 1922, and 1922 with 1924?

Mr. ORMSBY-GORE: As it is necessary to give the information desired in tabular form, I will, with my hon. Friend's per-

ACREAGE under Cotton Cultivation in British Possessions and Protectorates.


—
1919.
1922.
1923.
Percentage increase or decrease of acreage in 1922 compared with 1919.



Australia
…
72
8,969
40,000
+ 12,357
+ 345.9


Papua
…
—
—
—
—
—


Union of South Africa
…
11,465
10,764
—
- 6.1
—


Ceylon
…
134
320
901
+ 138.8
+ 181.6


N. Rhodesia
…
589
—
2,331
+ 295.8‡
—


Nyasaland
…
12,658
27,751
20,948
+ 119.3
- 24.5


Uganda
…
163,846
333,629
429,599
+ 103.6
+ 28.7


Kenya
…
Statistics not available.


Nigeria
…


Gold Coast
…


Bahamas
…


Turks and Caicos Islands
…


Jamaica
…
21
198
9
+ 842.9
- 95.5


St. Lucia
…
—
4
15
—
+ 275


St. Vincent
…
7,965*
4,745
4,515
- 40.4
- 4.9


Grenada
…
Statistics not available.
—
—


Leeward Islands
…
9,977
7,608
7,757
- 23.7
+ 1.9


Barbados
…
1,179
2,767
—
+ 134.7
—


Trinidad
…
Statistics not available.
—
—


Malta
…
630
855
—
+ 35.7
—


Cyprus
…
6,993*
10,324
6,021
+ 47.6†
- 41.7


Tanganyika
…
Statistics not available.


* 1920—previous statistics not available.
† 1924.
‡ 1923 compared with 1919.

Oral Answers to Questions — BRITISH EMPIRE EXHIBITION.

DEER HUNT SPECTACLE.

Mr. HARRISON: 39.
asked the Parliamentary Secretary to the Overseas Trade Department whether he is aware that it is proposed to hold a stag hunt in the stadium of the British Empire Exhibition, Wembley, for amusement; and whether he can stop this event taking place?

Sir ROBERT NEWMAN: 42.
asked the Parliamentary Secretary to the Overseas Trade Department whether it is intended to introduce a mock stag hunt at the British Empire Exhibition; and, if so, whether it is proposed to use live stags for that purpose?

Mr. RENNIE SMITH: 43.
asked the Parliamentary Secretary to the Overseas Trade Department whether stags are to be used in the forthcoming stag hunt at Wembley?

Mr. A. M. SAMUEL (Secretary, Overseas Trade Department): In reply to these

mission, circulate the reply in the OFFICIAL REPORT.

Following is the reply:

questions, I would refer to the answer which I gave on the 11th May to a similar question asked by the hon. Member for East Edinburgh (Dr. Shiels), a copy of which will be sent to the hon. Members.

CATERERS (EMPLOYMENT OF FOREIGNERS).

Captain CROOKSHANK: 40.
asked the Parliamentary Secretary to the Overseas Trade Department whether the caterers at the British Empire Exhibition at Wembley are under any obligation to employ only British subjects as waiters and waitresses at the various restaurants; and what, if any, steps are taken to see that such obligations are carried out?

Mr. SAMUEL: I am informed by the British Empire Exhibition authorities that, although the caterers are not under any obligation to employ only British subjects as waiters and waitresses, the great majority of those so employed are in fact British subjects.

Mr. H. WILLIAMS: Is it not a fact that all the waiters in the Garden Club are foreigners?

Mr. SAMUEL: I am not aware of that fact. The exhibition authorities, when making arrangements for 1925, were not in a position to impose conditions on the caterers. The trouble was to get caterers to undertake the work at all.

Mr. LANSBURY: Is this an insidious plan on the part of Zinovieff to introduce Bolshevism into this country?

ADMISSION CHARGE.

Captain GEE: 41.
asked the Parliamentary Secretary to the Overseas Trade Department whether he will consider the advisability of reducing the charge for admission to the British Empire Exhibition to 1s.?

Mr. SAMUEL: The charge for admission to the British Empire Exhibition is a matter for the Exhibition authorities, who inform me that they are alive to the importance of the question, and have it under consideration.

CERTIFICATES OF HONOUR (USE OF FOREIGN PAPER).

Mr. HURD: 44.
asked the Parliamentary Secretary to the Overseas Trade Department whether the certificate of honour issued to exhibitors at the British Empire Exhibition is made of British or British Empire material, in accordance with the general undertaking of the management committee; and if not, why not?

Mr. SAMUEL: I am informed by the British Empire Exhibition authorities that the contract for the printing of the Certificates of Honour issued to 1924 exhibitors was given to a well-known British firm on the definite understanding that all materials used should be of British Empire origin. The sample of paper submitted by the printers, and approved, was of British manufacture, but, through a mistake on the part of the printers, and admitted by them, foreign-made paper was used for some of the certificates. The Exhibition authorities are withdrawing the certificates that were issued on foreign paper, and the printers will reprint the certificates on British paper at their own expense.

Mr. HURD: What steps are being taken to prevent a recurrence of this breach of the understanding?

Mr. SAMUEL: It is human to err. It was an innocent mistake—it was not intentional—and I hope such a thing will not occur again.

Lieut.-Commander KENWORTHY: Would anyone have been any the wiser about this—or any the worse—had it not been raised by hon. Members opposite?

Mr. SAMUEL: It was the spirit of the exhibition that all these things should be of British manufacture wherever possible, and this was against the spirit of the whole scheme.

Oral Answers to Questions — INTERNATIONAL LABOUR CONFERENCE.

Mr. T. KENNEDY: 48.
asked the Prime Minister whether he is aware that, of the many Governments represented at the International Labour Conference now sitting at Geneva, the British Government is about the only one not represented by a Minister of State, and that for part of the time of the present Conference the sole representative of the British Government has been a civil servant; and whether he will give careful consideration to the advisability of having the Government more properly represented at forthcoming international labour conferences in view of the national and international importance of these gatherings?

The PRIME MINISTER (Mr. Baldwin): In accordance with the general practice, Great Britain was represented by a Minister, in the person of the Parliamentary Secretary to the Ministry of Labour, who remained at Geneva for more than the first week of the Conference, until his Parliamentary duties at home rendered his return imperative. His place was then taken by the Principal Assistant Secretary of the Ministry of Labour, who is responsible for this work. Of the 46 States who attended, only seven—namely, Bulgaria, Czechoslovakia, Denmark, Latvia, the Netherlands, Norway and Poland—were represented throughout by a Minister of State. Among those not so represented were Germany, Italy and Belgium, and the French Minister of Labour attended one sitting only of the Conference. I cannot accept the suggestion that British interests suffered owing to the method of representation at this Conference.

Oral Answers to Questions — PROPOSED SECURITY PACT.

Mr. HURD: 49.
asked the Prime Minister what is the attitude of the various Dominions regarding the proposed Security Pact in Europe?

The PRIME MINISTER: I cannot add anything to the statements which I made in the House on the 10th and 11th June as to the present stage of the negotiations. But I can assure my hon. Friend that the Dominion Governments have been kept in the closest touch with the various developments which have led up to the existing position.

Mr. HURD: Is it not a fact that the Canadian Government have made an announcement on this subject, which does not seem to tally with what the Prime Minister says?

The PRIME MINISTER: I am afraid I have not seen that, but they are kept closely in touch.

Captain BENN: Will the agreement require endorsement by the Dominions?

The PRIME MINISTER: I am not quite sure about that. Perhaps the hon. and gallant Member will put down the question.

Oral Answers to Questions — FOOD COUNCIL.

Mr. TAYLOR: 50.
asked the Prime Minister whether he proposes to take legislative action to set up a Food Council, in accordance with the recommendations of the Food Commission?

The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Sir Burton Chadwick): I have been asked to reply. The matter is under consideration.

Colonel DAY: When can we hope to have a satisfactory reply to that question?

Sir B. CHADWICK: The matter is being thoroughly considered.

Colonel DAY: When does the hon. Gentleman think it will have been thoroughly considered?

Mr. TAYLOR: Is it not the fact that the Prime Minister said last week that in his opinion it was not necessary to take legislative action to set up a Food Council; and, in view of the recommendation of paragraph 38 (b) of the Commission's Report, may we have an answer on that subject soon?

Sir B. CHADWICK: It is that very matter which is under consideration.

Oral Answers to Questions — NATIONAL EXPENDITURE.

Mr. MORRIS: 51.
asked the Prime Minister whether the Cabinet Committee, which it was stated by the Chancellor of the Exchequer would be set up to examine recurring blocks of national expenditure in order to reduce the total Estimates by about £10,000,000 a year, has yet been appointed?

The PRIME MINISTER: No, Sir. The preliminary examination that is necessary is in hand, but it is of course not possible for my right hon. Friend the Chancellor of the Exchequer, until the Finance Bill has passed through all its stages, to participate regularly in the sittings of a Committee of this character

Oral Answers to Questions — UNEMPLOYMENT (CABINET COMMITTEE).

Mr. MORRIS: 52.
asked the Prime Minister when the Report of the Cabinet Committee on Unemployment may be expected?

The PRIME MINISTER: Reports of the Unemployment Committee of the Cabinet are received from time to time as occasion requires, and the subject is constantly under the consideration of the Cabinet.

Oral Answers to Questions — ELECTRICAL DEVELOPMENT.

Mr. MORRIS: 53.
asked the Prime Minister when the Cabinet Committee which has been considering the Report of the Expert Committee on Electrical Development may be expected to report?

The PRIME MINISTER: Every effort is being made to expedite the consideration of the Report of the Expert Committee on Electrical Development. In view, however, of the very important issues involved, some time must necessarily elapse before the Cabinet Committee which is examining the matter can complete their labours, and I am, therefore, not at present in a position to say when a Report of this Committee may be expected.

Mr. J. JONES: Nine months?

The PRIME MINISTER: Before that.

Oral Answers to Questions — HOUSE OF LORDS.

Lieut.-Commander KENWORTHY: 54.
asked the Prime Minister whether the question of the Reform of the House of Lords is still under the consideration of the Government; and, if so, whether he can state when he will be able to announce the policy of the Government on this matter?

The PRIME MINISTER: The policy of the Government will be announced during the lifetime of the present Parliament.

Lieut.-Commander KENWORTHY: Does the right hon. Gentleman consider that is quite a right answer to give to the question? We are having announcements made by Lord Selborne on the matter, and no one knows what the length of this Parliament will be.

The PRIME MINISTER: This is the first time a question has been put to a responsible Minister, and my answer contains the literal truth.

Oral Answers to Questions — AGRICULTURE.

SUGAR-BEET FACTORIES (FOREIGN MACHINERY).

Sir W. de FRECE: 56.
asked the Minister of Agriculture if he will give the names of the companies owning the sugar-beet factories which have imported foreign machinery, the extent in each case of such commitments, and the countries from which it has come?

Mr. STEPHEN: 58.
asked the Minister of Agriculture the total commitments of the various sugar-beet factory companies enjoying the benefit of The British Sugar (Subsidy) Act, 1925, since the passage of the Act, and the value of those commitments for machinery, etc., imported into this country; and the value of similar commitments for machinery, etc., produced in this country?

Sir W. de FRECE: 61.
asked the Minister of Agriculture the exact terms granted by the Government to the Van Rossum group with regard to the importation of foreign machinery in the beet factories, and how these terms differ from those granted to other British sugar-beet organisations?

The MINISTER of AGRICULTURE (Mr. Edward Wood): When the negotiations with the late Govern-
ment took place, the two manufacturing groups than existing each promised to erect three new beet-sugar factories if the subsidy were granted. Arrangements to carry out this promise were put in hand as soon as the late Government's announcement was made. When the decision of the present Government to impose the 75 per cent. condition as to British plant and machinery was announced, representations were made to me that financial and technical commitments of a responsible character had already been entered into in respect of the three factories promised by Mr. Van Rossum. After careful consideration, I decided that the enforcement of the new condition would, in fact, be a serious breach of faith as regards these factories, and that the early progress of the industry in this country would best be served by waiving the requirement in their case. If these three factories are successful, Mr. Van Rossum has promised to build other factories in this country and, in their case, to make no application for dispensation from the machinery condition. In all other cases the requirement is being observed. The total approximate commitments, as regards plant and machinery of all factory companies since the passing of the Act, is £1,035,800, of which £754,500 is of British and £281,300 of foreign manufacture. I will circulate in the OFFICIAL REPORT a statement showing the names of the factory companies, details of the total commitments referred to and the amount and origin of the machinery obtained from foreign sources.

Mr. MAXTON: Does that mean that in any future factories that are erected 100 per cent. of the machinery will be British, to make up for the 25 per cent.?

Mr. WOOD: No. I cannot give that guarantee, because that would be going beyond the wording of the Act. The Act only imposes a minimum of 75 per cent., and I have no statutory powers to insist on more

Mr. MAXTON: But has not the right hon. Gentleman discretionary power, specifically given in the Act, and is he not exercising it now?

Mr. WOOD: I have discretionary power to exempt factories from the 75 per cent. condition, but I have no statutory or discretionary power to insist on more than 75 per cent.

Mr. HARRIS: Can the right hon. Gentleman say why they imported this foreign machinery? Was it because it was more efficient, or cheaper, or better, or was it that it was the most suitable that was available?

THE TOTAL APPROXIMATE COMMITMENTS OF BEET SUGAR FACTORIES SINCE THE PASSING OF THE ACT AS REGARDS PLANT AND MACHINERY ARE:—


Name of Company.
British.
Foreign.
Total.
Origin.



£
£
£



Home Grown Sugar, Ltd., Kelham
Nil
Nil
Nil
Built in 1921.


The English Beet Sugar Corporation, Ltd., Cantley.*
12,000
7,000
19,000
Built in 1911. Dutch and German.


The Anglo-Scottish Beet Sugar Corporation, Ltd., Colwick.*
115,000
5,000
120,000
Built in 1924. Belgian and German.


The Anglo-Scottish Beet Sugar Corporation, Ltd., Spalding.
120,000
8,200
128,200
From Germany and Belgium.


The West Midland Sugar Co., Ltd., Kidderminster.
120,000
8,200
128,200


The Ely Beet Sugar Factory, Ltd., Ely.
81,000
84,000
165,000
Mainly Dutch with some German.


The Ipswich Beet Sugar Factory, Ltd., Ipswich.
79,000
105,000
184,000


The United Sugar Company, Ltd., Bury St. Edmunds.
114,000
34,500
148,500
From Czechoslovakia.


The British Sugar Manufacturers, Ltd., Wissington.
113,500
29,400
142,900



754,500
281,300
1,035,800



* Plant for extensions.

TITHE BILL (CORN RENTS).

Mr. LAMB: 57.
asked the Minister of Agriculture the total annual value of corn rents in England and Wales; and why these rents are not treated in the Tithe Bill in the same way as tithes?

Mr. WOOD: I regret that I have no information enabling me to answer the first part of my hon. Friend's question. With regard to the second part, as my hon. Friend is no doubt aware, corn rents differ from tithe rent charge in several material respects, which appear to preclude identical treatment in both cases. If my hon. Friend would like a more detailed explanation I shall be happy to write to him on the subject.

WAGES.

Mr. T. WILLIAMS: 59.
asked the Minister of Agriculture how many cases have been proved where farmers have deliberately refused to pay the wages which have been settled by wage committees; how many farmers have been proceeded against for evading these decisions; and, seeing that this section

Mr. WOOD: The reason was partly financial, but also that the machinery was immediately available with which to start operating this season.

Following is the statement promised:

who evade the law are a menace to the better type of farmer, will he insist on prosecutions wherever evasions are discovered?

Mr. WOOD: As I informed the hon. Member on the 9th instant, a number of complaints of payment of wages at less than the minimum rates have been investigated by the inspectors appointed for the purpose, but it is impracticable to state the number of cases, if any, where the non-payment could be said to amount to a deliberate refusal. In many cases it is clear that on each side there has been misunderstanding which investigation has served to remove, and in others there is not sufficient evidence to prove that infringement of the rates has taken place. If any cases of deliberate refusal to pay minimum wages occurred, I should, of course, immediately authorise legal proceedings, and, as stated in my previous reply, proceedings are already being taken in cases where the circumstances warrant such action.

Mr. WILLIAMS: But surely the right hon. Gentleman will know that there are
thousands of cases where farmers have deliberately refused to pay the wages settled by the wage committees; is he not aware that any evasion at all is a breaking of the law; and would he apply similar treatment to any farm labourer who broke the law that he is now applying to farmers who are constantly breaking it?

Mr. WOOD: I think the shortest and best answer I can give to the hon. Gentleman is that, if he has any case in which he is satisfied that a prosecution will lie, where I have not instituted one, I invite him to bring it to me.

Mr. WILLIAMS: Has the right hon. Gentleman not already stated, in reply to a previous question, that cases have been discovered where the farmers have not complied with decisions of the committees, and does he not think that, in those cases, where misunderstanding has not crept in, it is a deliberate breach of the law and ought to be dealt with?

Mr. WOOD: I really cannot add anything to what I have said, that where I am satisfied that a case lies, I shall institute proceedings. If the hon. Member does not believe me, I can carry it no further.

Mr. WILLIAMS: 60.
also asked the Minister of Agriculture how many youths working on the land at Epworth, near Doncaster, are in receipt of the wages which have been settled by the Lincolnshire wages committee; what steps he has taken, if any, to ascertain whether correct wages are paid in this and other similar districts where men and boys are disorganised; and how the decisions of the wages committees are being advertised?

Mr. WOOD: I have no information to show that the wages paid in the district mentioned are not in accordance with the minimum rates fixed by the Agricultural Wages Committee. With regard to the second part of the question, the inspectors appointed under the Agricultural Wages (Regulation) Act are constantly engaged in making investigations on farms in various parts of the country with a view to ascertaining whether the minimum rates are being duly observed. The Orders made by the Agricultural Wages Board giving effect to the decisions of the Agricultural Wages Committees fixing minimum rates are advertised in the local
Press and copies are distributed to the organisations of farmers and farm workers. Posters giving the main details of the Orders are exhibited in the Employment Exchanges and rural post offices throughout the areas.

Mr. WILLIAMS: Is the right hon. Gentleman not aware that in certain agricultural areas no notice has been given of the wages fixed by the county committee, and that at Epworth, near Doncaster, of 14 persons whom I saw personally a week ago, not one was receiving the wages settled by the Lincolnshire county committee, and will he ask one of his inspectors to investigate cases of this description, where the workers are in any way disorganised and fear to ask for the wages to which they are entitled?

Captain CROOKSHANK: Is the right hon. Gentleman aware that Epwortn has a weekly newspaper in which this information is given?

Mr. WILLIAMS: But they are not getting the money.

Mr. WOOD: I will certainly have the investigation for which the hon. gentleman asks made, but my information is exactly that of the hon. and gallant Member for Gainsborough (Captain Crook-shank), to the effect that these advertisements have been inserted in the press, and it is obviously neither the fault of the hon. gentleman who puts the question, of my hon. and gallant Friend, or of myself if these men have not seen them.

Mr. WILLIAMS: 62.
further asked the Minister of Agriculture what action he has taken, if any, against farmers who have dismissed their workers and evicted them from their houses, following upon a visit from his inspectors who have enforced payment of wages in accordance with the county wage board decisions?

Mr. WOOD: I have no power to take any action in the case to which the hon. Gentleman refers, but I hope and believe that unjustifiable dismissals of workers on such grounds are very rare?

Mr. WILLIAMS: Is it not true that the right hon. Gentleman is aware that cases of this description have taken place, and will he tell the House what steps he intends to take where farmers, through victimisation, or threatened
victimisation, are attempting to nullify the operation of the Agricultural Wages Regulation Act?

Mr. WOOD: I should like to see details of the cases before expressing an opinion about them, but when I have seen them I am afraid my statutory powers will remain the same as I have stated in my answer.

Mr. WILLIAMS: Is that not one solid reason why, where cases of evasion are discovered, action should be taken immediately?

Oral Answers to Questions — POST OFFICE.

SAVINGS BANK (ACCOUNTS AND DEPOSITS).

Colonel WOODCOCK: 63.
asked the Postmaster-General the number of accounts in the Post Office Savings Bank and the total amount of the deposits?

The POSTMASTER-GENERAL (Sir William Mitchell-Thomson): The estimated number of active accounts in the Post Office Savings Bank at 30th April, 1925, was 12,600,000, and the estimated balance due £283,000,000.

Mr. H. WILLIAMS: Can the right hon. Gentleman tell us whether the assets are equal to the liabilities?

Sir W MITCHELL-THOMSON: Oh, yes.

BELFAST (SUPERVISING OFFICERS).

Captain DIXON: 64 and 66.
asked the Postmaster-General (1) why 86 supervising officers in the Belfast Post Office were not granted metropolitan status when the Government of Northern Ireland was established in Belfast, and thus given the same status as that granted to other Post Office servants in Belfast as well as that given by the Government of Northern Ireland to their own officials in that city?
(2) if he is aware that a large number of the 86 supervising officers in Belfast are performing duties superior to that of similar supervising officers in London and Edinburgh, and carry out work formerly performed by higher executive officers in the accountant's office, Dublin, and the secretary's office, London; and what saving has been effected by the transfer of this work to Belfast?

Sir W. MITCHELL-THOMSON: The grading of post offices for purposes of the pay of the staff must be governed by Post Office standards and the classification of the Belfast post office is the same as that of post offices in Great Britain where the volume of work is similar. There are no adequate grounds for granting a higher classification to the supervising staff in Belfast. I am aware that certain work formerly performed elsewhere is now undertaken by the staff in Belfast, but there has been no improvement in the general level of the duties of the supervising officers such as would warrant upgrading of the office. I am unable to state the financial effect of the changes.

BELFAST (TELEPHONES).

Captain DIXON: 65.
asked the Postmaster-General if he is aware that many people in Belfast have applied for telephones and have been put off owing to the shortage of the necessary supplies; and whether, in view of the unemployment which exists, he will see his way to employ some additional labour in order to expedite the carrying out of the contracts, some of which have been entered into over a year ago?

Sir W. MITCHELL-THOMSON: It is the case that a number of applicants are awaiting telephone facilities at Belfast. Much difficulty has been experienced in arranging for the necessary accommodation and plant. Additional internal and external plant is now being installed with all possible speed and it is anticipated that within the next few months immediate difficulties will have been solved. There is no shortage of unskilled labour and skilled men have been sent to expedite the completion of this work.

Oral Answers to Questions — PARIS EXHIBITION (BRITISH RESTAURANT).

Sir HARRY BRITTAIN: 55.
asked the Parliamentary Secretary to the Overseas Trade Department which was the British catering firm approached with the suggestion of taking in hand the British Restaurant, at the British Pavilion, at the Paris Exhibition; and whether any opportunity was given to any other British concern, thoroughly experienced as caterers, in France to undertake this business?

Mr. SAMUEL: I have called for a fuller report on the whole question from the British Commissioner-General in Paris, and will communicate with ray hon. Friend as soon as I have received it.

Oral Answers to Questions — FRANCE, POLAND, AND CZECHOSLOVAKIA.

Captain BENN: 67.
asked the Secretary of State for Foreign Affairs whether he can see his way to issue a White Paper stating exactly what obligations of mutual assistance bind France on the one side and Poland and Czechoslovakia on the other?

Mr. SAMUEL: These agreements have already been published, in the League of Nations Treaty Series, and are therefore available to hon. Members and the public.

Oral Answers to Questions — CHINA (DISTURBANCES).

Mr. TREVELYAN: 68.
asked the Secretary of State for Foreign Affairs whether, prior to the shooting in Shanghai, there was an industrial dispute during which a Chinaman was killed in a foreign mill; whether the crowd, which was fired upon by the police, was demonstrating in connection with this dispute; and whether or not it was armed?

Mr. SAMUEL: For some months before the recent riot, industrial unrest had been continuous in the Japanese mills at Shanghai. There had also been disturbances in the Japanese mills at Tsingtao, which is under Chinese administration, where rioters were fired upon and killed by the Chinese police. The unrest at Shanghai involved the killing of a Japanese mill-manager and, later, of a Chinese employé. This last incident, which occurred on the 15th May, led to more violent agitation, in which the students joined to support the employés. In doing so, they came into collision with the police on the 30th May. The crowd was unarmed, but was very large, and was threatening the lives of the police. The crowd attempted to rush the police station, which was full of arms, in order to release the arrested students. Warning was given before firing.

Mr. W. THORNE: Is it not a fact that the cause of all this trouble is in conse-
quence of the beastly low wages paid to the employés and the employment of young children?

Mr. LOOKER: Before the hon. Gentleman answers that question, will he say if there is any control at present over the wages paid by the foreign residents at Hong Kong and Shanghai?

Mr. SAMUEL: The British Government and the British community have done all they can in regard to improving the conditions of labour within the International Settlement. Outside that Settlement the British Government or community have no control whatever—

Mr. J. JONES: Why send battleships there?

Mr. SAMUEL: —and we have no control over the employment of children in China generally.

Sir WILLIAM DAVISON: Is it not a fact that, however poor the wages are, they are better within the International Settlement than elsewhere in China, and does not M. Zinovieff take credit for the troubles?

Mr. MACKINDER: Is it going to become a habit to call a strike a "riot"?

Mr. LANSBURY: May I ask whether there is any evidence that there was any attack by the Chinese on the police station with any arms whatsoever, and is it not a fact that American and British missionaries have stated that the people who were killed and wounded were shot in the back, and, therefore, could not have been shot while trying to storm a police station?

Mr. SAMUEL: I do not agree it is true that those who were shot were shot in the back. While it is quite true to say they were unarmed, it is also a fact that it was a very large and murderous crowd—

Mr. LANSBURY: How do you know? You were not there.

Mr. SAMUEL: —that the crowd tried to rush the police station, which was full of arms, and that if they had obtained those arms, there is no doubt greater bloodshed would have taken place.

Mr. LANSBURY: May I ask whether, in order to preserve peace out there, the Government will organise battalions of shareholders to go and do their own dirty work?

Mr. FOOT MITCHELL: 69.
asked the Secretary of State for Foreign Affairs whether our policy with respect to the trouble in China is adopted in concert with other Powers interested; and if there are any points of difference, will he state their nature?

Mr. SAMUEL: The answer to the first part of the question is in the affirmative. No points of difference have arisen, and I take this opportunity of expressing on behalf of His Majesty's Government their appreciation of the firm and tactful manner in which the situation is being handled by the senior member of the Diplomatic Representatives concerned at Pekin, the Italian Minister.

Mr. J. JONES: Is the hon. Gentleman prepared to say that British battleships shall not be used to back up international sweaters in China?

Mr. LOOKER: Is it not in accordance with British interests, and with the policy of His Majesty's Government, to assist as far as possible the natural aspirations of the Chinese people?

Mr. SAMUEL: The attitude of His Majesty's Government is one of respect for China, Chinese culture and Chinese civilisation, literature and art. The British Government desire the prosperity and the peaceful condition of China, and, where possible and desired, the British Government will lend China all their support to that end.

Mr. JOHNSTON: Arising out of the hon. Gentleman's statement, that the British Government have done everything possible to better the conditions in the Shanghai mills under British jurisdiction, will he tell us what steps he has taken to enforce the conclusions come to by the Shanghai Municipal Committee's Report, and why it was that a majority could not be got to attend?

Mr. SAMUEL: Yes. I will give a reply which may not be quite accurate, but which is thereabouts correct. The British community and the British Consul-General working together in sympathy have tried all they can to initiate a bye-
law to be enacted by the Shanghai Municipal Authority against child labour. The British Government at home have supported that action, and two ladies, experts in factory welfare work, one of them Miss Harrison, of the Young Women's Christian Association, and the other Dame Adelaide Anderson, who are well known in labour circles, have been members of the Shanghai Commission to deal with child labour and night hours of employment. This Commission was set up by the Municipal Council of the Settlement and issued a Report a year ago. A regulation was introduced by the Shanghai Municipal Authority, who adopted the Report, but there was not a sufficient quorum to pass it at a specially convened meeting of ratepayers. That took place in April, 1925. It was put down again for the 2nd June this year, and it would have come up for discussion, and possibly would have been passed. It has the good will of the British Government and the support of our Consul-General at Shanghai and the British community, but these unfortunate circumstances arose and a quorum did not attend.

Mr. LOOKER: Is it not a fact that in the British cotton mills of Shanghai regulations exist prohibiting the employment of boys under 10, and girls under 12?

Mr. SAMUEL: That is, I think, the proposal. There are only eight Shanghai mills out of 66 cotton mills which are under British ownership.

Mr. LAWSON: 71.
asked the Secretary of State for Foreign Affairs the total number of killed and wounded as a result of shooting since the present industrial troubles began in Shanghai; and whether he can give the nationalities of the same?

Mr. SAMUEL: The casualties at Shanghai so far officially reported are 21 Chinese killed and 65 wounded, and one foreigner wounded, who is believed to be of American nationality.

Mr. LANSBURY: May I ask if any policeman was wounded?

Mr. SAMUEL: I hope not.

Captain GEE: Is it not a fact that many of these questions are put at the instigation of Moscow, to cause more trouble in China?

Mr. SPEAKER: rose—

Mr. LAWSON: May I draw your attention, Mr. Speaker, to the fact that an insinuation was made respecting myself in regard to a question I have on the Paper, to the effect that this question was put as the result of Bolshevist influence from Moscow upon myself? May I ask you if that is an insinuation that ought to be made by a Member of this House, and should it not be withdrawn?

Mr. SPEAKER: I at once rose to say that the statement was a very improper interjection to make, but I did not think it was worth while to take any further notice.

Captain GEE: On a point of Order. My question, with all respect to you, Sir, was dealing with some of the supplementary questions.

Mr. SPEAKER: It was not a proper question to put, in any case.

Mr. LOOKER: 72.
asked the Secretary of State for Foreign Affairs how many British mills there are in Shanghai; if any regulations are in force in such mills governing the age at which young persons may be employed therein; how many Chinese, Japanese, or other non-British mills there are in Shanghai; and if any regulations are in force in such mills governing the age at which young persons are employed?

Mr. SAMUEL: According to a Report published last July by the Municipal Council of the International Settlement at Shanghai, the number of British textile mills is 14. No municipal regulations are in force governing the age at which young persons may be employed. But steps have been taken by the managers of the British mills to give effect to the recommendation of the Child Labour Commission appointed by the Municipal Council, that the employment of children under the age of 10 years should be prohibited. In the area covered by the Foreign Settlement and the two Chinese districts of Chapei and Pootung (the only areas of the Chinese-controlled city of Shanghai regarding which figures are available), there are 273 mills and factories, of which 25 are British, 186 Chinese and 31 Japanese-owned. No municipal regulations are in force governing the age at which young persons may be employed therein.

Mr. J. JONES: Is it the case that in any British factory in China, children are working under the age of eight?

Mr. SAMUEL: Well, Sir, broadly speaking, the managers of the British factories in China desire that all the conditions under which their people in the international area are working shall be a model and an example to the rest of China.

Mr. DALTON: That is not an answer to the question, Mr. Speaker. It is not what they desire, but what they do.

Mr. PETHICK-LAWRENCE: 74.
asked Secretary of State for Foreign Affairs whether he is now in a position to state the total number of Chinese killed by the British forces in the recent disturbances; whether all or any of these were armed; and whether he will give instructions that in future unarmed demonstrators shall not be fired on with ball cartridge?

Mr. SAMUEL: No Chinese have been killed by British forces in the recent disturbances in China. The Chinese casualties inflicted by the police force of the international municipality of Shanghai have been reported as 21 killed and 65 wounded. The mobs coining into conflict with the police are reported to have been unarmed. As regards the last part of the question, His Majesty's Government are not in a position to issue instructions to an international municipality.

Captain ARTHUR EVANS: Will the hon. Gentleman state whether, as a matter of principle, it is not in the interests of the preservation of life of the British and British interests and property abroad, that these discretionary powers should be left to the officer on the spot?

Mr. HARRIS: What is the composition of this police force and its nationality? Who controls it, and to whom are the members responsible?

Mr. SPEAKER: The hon. Member had better put down that question.

Captain BENN: 78.
asked the Secretary of State for Foreign Affairs whether he can now make a statement showing the hours of labour, age of employment, wages paid and other particulars relating to labour conditions in the mills in China?

Mr. MacKENZIE LIVINGSTONE: 77.
asked the Secretary of State for Foreign Affairs whether he can state the number of Chinese employed in the foreign concession in Shanghai, the current rate of wages, and the average number of hours worked per week, and what are the regulations as to age, etc., affecting juvenile employment?

Mr. SAMUEL: Such information as I have regarding the number of Chinese employed in the foreign settlement in Shanghai is contained in an appendix to the Report of the Child Labour Commission published by the Municipal Council. A copy of this Report has been placed in the Library of the House. A statement showing the average hours of labour and wages of artisans and labourers of various classes in Shanghai is given in Appendix V of the Department of Overseas Trade Report on the Commercial, Industrial and Economic Situation of China in June, 1924, published by His Majesty's Stationery Office. Further information regarding labour conditions in China is to be found in the Chapter on Labour in the China Year Book, for which the agents in London are Messrs. Simpkin, Marshall, Hamilton, Kent and Company, Limited. No regulations are in force governing the age of employment.

Captain BENN: Would it be true to say that quite young children are employed all day for seven days a week merely to earn their keep?

Mr. SAMUEL: In China, I am sorry to say, the exploitation of child labour is a deplorable thing.

Captain BENN: May I then put it to the hon. Gentleman that it is not necessary to go further to discover the cause of the present trouble?

Sir W. DAVISON: However deplorable the conditions may be, as a matter of fact, are they not better in the foreign settlements than in the mills of the Chinese themselves; and is it not a further fact that these, conditions are being used merely as a pretext?

Mr. SAMUEL: The foreign settlements, and especially those in which British capital is employed, are used as a model for bringing the conditions of labour in China on to a proper basis. Conditions in these international settlements are certainly better than those in the Chinese
areas over which the foreign settlements have no control at all, and cannot, indeed, have any control.

Mr. LAWSON: Are not the people responsible for the conditions which the hon. Gentleman has just condemned the real Bolshevists?

Mr. LOOKER: Is it not desirable in the interests of peace in China and the lives of all the foreigners living there, as well as of the Chinese themselves, that nothing should be done in this House to add to the excitement by any questions here?

Mr. TREVELYAN: (by Private Notice) asked the Under-Secretary of State for Foreign Affairs whether he can give any information as to the nature and extent of the disturbances at Hankow and the loss of life ensuing; whether there is any trouble in Pekin, and whether, besides moving troops and ships of war, His Majesty's Government have begun to make any proposals for removing the root causes of the widespread ill will manifested in China to certain foreign nationalities?

Mr. SAMUEL: On the 11th June there was a riot at Hankow by a large and violent mob which, I regret to say, killed one Japanese subject and badly wounded two. The riot culminated in a determined attack on the British concession. Firing only took place in the last resort, after the use of the fire hose had failed; it resulted in 16 casualties, of which two were fatal. His Majesty's Consul reports that the firing was necessary and inevitable. Had the Chinese authorities co-operated promptly with the defence force, this deplorable loss of life would have been avoided; when they eventually did so, the situation became easier. All the foreign naval forces present co-operated in the defence of the British, French and ex-Russian concessions at Hankow. The situation there still gives cause for anxiety, but H.M.S. "Hollyhock" was reported yesterday to be due shortly from Nanking, and will later be replaced by H.M.S. "Despatch."
I have no official information as to the strikes in foreign factories at Hankow which, according to newspaper reports, have been occurring for some time past, and which apparently were the immediate occasion of the disturbance; but
it is clear that the Hankow disturbances are similar in nature to those at Shanghai; that is to say, they are a symptom of a deep and widespread unrest exploited by interested parties to stir up feeling against those foreign Powers which, precisely because they are the Powers with the largest interests in China, are deeply concerned to cooperate with her in the task of progress and reform.
There have been, and there continue to be, demonstrations by students at Pekin, but they are not considered to be dangerous.
In the opinion of His Majesty's Government, the surest remedy for the ill will towards foreign nationalities now being manifested in China will lie in an attempt on the part of the Treaty Powers to give practical effect to the spirit of the decisions reached at the Washington Conference, a spirit which contemplated the co-operation of China and the Powers in measures beneficial to China as a whole. His Majesty's Government, now and for some time past, have been considering the best means of overcoming the difficulties that militate against the success of any such attempt. Those difficulties—and this may be said without any desire to apportion responsibility—arise largely from the absence of effective governmental authority in China. His Majesty's Government trust that the approaching Tariff Conference will afford an opportunity for removing such obstacles, for dissipating the present atmosphere of unhappy distrust, and for inaugurating a new era of fruitful cooperation between China and the Powers.

Mr. W. THORNE: Is the hon. Gentleman aware that one of the causes why many of us on this side of the House take such a deep interest in this question is because many of us, including myself, have been exploited? I was when I was 16 years of age, and some of my friends have been too. That is the reason why we are taking a keen interest in this Shanghai business.

Mr. SAMUEL: We all take a keen interest in it, on all sides of the House. And we all desire peace and prosperity in China, and His Majesty's Government will be very pleased to do all they can to assist China.

Mr. RAMSAY MacDONALD: May I ask whether the Government are satisfied that, in co-operation with the other Allies, they are taking every step possible to prevent this disturbance changing its features into a really big international trouble in the Far East?

The PRIME MINISTER: I can certainly assure the House that that is the case. We are watching the situation most anxiously in this country, and, as I believe was announced to the House, the Treaty Powers represented at Pekin have sent a Commission of Inquiry to Shanghai to investigate and to report with all speed. The Chinese Government have sent two high officials to conduct a similar inquiry, and I have every reason to believe that those two inquiries will work together in perfect harmony and with a desire to attain the same end, that is, peace in China, and enable us to take the steps which have been foreshadowed of trying to come to an arrangement on the internal tariffs which may help in the consolidation of internal Chinese Government. The absence of these tariffs, whatever other causes there may be, is one of the root causes of the present trouble—at any rate a root cause why it is so difficult to grapple, as a central Government would be able to grapple, with troubles of this kind.

Mr. Mac DONALD: May we be assured that the Government's position is not merely to protect life but also to remove the very serious problems in China?

The PRIME MINISTER: We do not lose sight of that. One of the difficulties is that, especially at a time like this, it is our duty to protect so far as we are able the lives of European people not only in the port towns but inland in China.

Mr. W. THORNE: Remove the cause.

The PRIME MINISTER: It is extremely difficult, but I can assure the House that we are doing everything we can to secure the end which we all desire.

Oral Answers to Questions — SUDAN.

SIR SAYED ALI EL MIRGHANI.

Mr. JOHNSTON: 75.
asked the Secretary of State for Foreign Affairs the nature of any privileges enjoyed by Sir Sayed Ali El Mirghani under the Sudan Govern-
ment; and whether any countenance is given by the Sudan Government to the agents of Sir Sayed Ali in collecting religious alms from the people of the Sudan?

Mr. SAMUEL: So far as I am aware Sir Sayed Ali El Mirghani only enjoys such courtesy privileges as are accorded to other great religious leaders in the Sudan. The Sudan Government do not impose restrictions upon voluntary offerings which the followers of such leaders have always been in the habit of making to the heads of their respective sects.

Mr. JOHNSTON: Is the hon. Gentleman satisfied that the forces of the British Government are not used to ensure the collection of these alms?

Mr. SAMUEL: I should not like to give an answer to that question off-hand without more information than I have, but if the hon. Gentleman will put a question down I will make it my business to get the information for him as soon as may be

Lieut.-Colonel JAMES: Is it not a well-known fact that members of the Sherieffian family, who are descendants of the Prophet, always collect alms from their supporters in all Mohammedan countries?

LOANS (PAYMENT).

Mr. JOHNSTON: 76.
asked the Secretary of State for Foreign Affairs what provision, if any, has been made by the Sudan Government in their Budget of the current year for payment of the loan of £13,000,000 for which the British Government are guarantors?

Mr. SAMUEL: The Sudan Government Loans guaranteed by the British Government have been raised principally for the Gezira Irrigation Project, that is to say, for the construction of the dam across the Blue Nile and the canalisation of the Gezira area. This project will not be completed till towards the end of the current year, and provision has been made for treating interest on the loans raised for the above purpose during the period of construction, and until the proper operation of the scheme commences as part of the capital cost of the scheme. The Sudan Government will not, therefore, have to provide for the payment of interest in respect of the loans raised for the Gezira project out of its
own Budget until 1926. The Sudan Government has, however, provided in its Budget for 1925 a sum of £E. 152,000 towards building up a reserve against its commitments in respect of the Gezira project. It has further provided for paying interest on that part of the loan expenditure which has been devoted to purposes which have already been completed—that is to say, on a sum of £771,500, being part of the 5½ per cent. loan issued for railway extensions.

The total issues of Sudan Loans is not £13,000,000 as stated, but £11,643,400, made up as follows:



£


5½ per cent. loan
6,380,000


4½ per cent. loan
3,763,400


4 per cent. loan
1,500,000


Total
11,643,000

Oral Answers to Questions — CONSTANTINOPLE MUNICIPAL LOAN.

Sir FREDRIC WISE: 79.
asked the Secretary of State for Foreign Affairs the position of the City of Constantinople Five per cent. Municipal Loan secured by the receipts from the Galata Bridge; and, if these receipts are not yet being received for the loan, if he will place the facts before the Anglo-Turkish panel of the Mixed Arbitral Tribunal?

Mr. SAMUEL: The Constantinople Prefecture paid to the National Bank of Turkey on 3rd March last the sum of £T. 132,000 from the receipts of the Galata Bridge tolls on account of the Constantinople Municipal Loan. This amount is apparently calculated to represent, on the basis of French francs as opposed to sterling, the annual payment of interest and sinking fund. The question of bringing the matter before the Mixed Arbitral Tribunal is one for the bondholders to consider.

Oral Answers to Questions — ROYAL AIR FORCE (FATAL PARACHUTE ACCIDENT).

Mr. DALTON: 80.
asked the Secretary of State for Air whether he is aware that Corporal Sydney Ronald Wilson, of No. 12 Squadron, Royal Air Force, was killed on 25th May last while engaged in a practice parachute jump from an aeroplane; that this was his first flight: and that the
evidence at the inquest showed that, being unaccustomed to flying, he lost his nerve and failed to pull the cord; whether it is customary to require airmen to jump from an aeroplane during their first flight; and, if so, whether he will cause this custom to be discontinued?

The UNDER-SECRETARY of STATE for AIR (Major Sir Philip Sassoon): The answer to the first part of the question is in the affirmative, and I should like to express my very deep regret for the occurrence of this unfortunate accident. As regards the second part, it is not the case that it was Corporal Wilson's first flight. On the contrary, he had had previous air experience and had indeed qualified as an aerial gunner. It was, however, his first parachute jump from an aeroplane. As regards the third part the evidence at the inquest was to the effect stated, except that I am not aware that there was any evidence to suggest that this airman was unaccustomed to flying, a suggestion which, as I have already explained, is contrary to the facts. As regards the fourth and fifth parts of the question, no officer or airman would be allowed to carry out a practice parachute jump until he possessed considerable air experience, and it is clearly laid down in Regulations that such jumps are only to be made by volunteers.

Major HORE-BELISHA: Could the hon. Baronet say if this death is considered to be a death caused in the course of duty, and if a pension or other compensation is payable to the dependants?

Sir P. SASSOON: I should like notice of that question.

Captain GEE: Will the hon. Baronet consider the advisability of setting up a Committee to go into this matter, on account of the increasing number of fatal accidents taking place in the Air Force?

Captain BENN: Is it not a fact that the increasing use of the parachute would be one of the greatest means of saving the life of the flying men?

Sir P. SASSOON: Yes, that is so.

Oral Answers to Questions — CONTRIBUTORY PENSIONS BILL.

Mr. LOWTH: 81.
asked the Minister of Health if the Widows', Orphans' and Old Age Contributory Pensions Bill, in its
present form, secures benefits to the persons, of ages between 65 and 70 years, who were dismissed from their employment when they reached 65 years of age and have now dropped out of insurance by reason of their inability to pay the whole of the premium?

The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Sir Kingsley Wood): An insured person between the ages of 65 and 70 on the 2nd January, 1928, will be entitled to an old age pension provided he satisfies the statutory conditions. It does not follow, because a man lost his employment and has failed to secure other employment, that he has ceased to be an insured person or that it will be impossible for him to comply with the statutory conditions. The object of the Prolongation of Insurance Act was to keep in insurance persons who, being out of work, were genuinely seeking work, and in applying the statutory condition requiring payment of at least 39 contributions on average in the two contribution years immediately prior to the 2nd January, 1927, weeks of genuine unemployment as well as weeks of sickness will be treated as weeks for which contributions were paid.

Major HORE-BELISHA: Is the position not still more serious in regard to those employé's who are bound to retire at the age of 60, as Government employés do?

Sir K. WOOD: If the hon. and gallant Gentleman will put a question down I will give him an explanation about that.

Mr. OAKLEY: 82.
asked the Minister of Health what method he proposes to adopt after 2nd January, 1928, with regard to the collection of contributions payable by employers in respect of insured persons over the age of 65 years?

Sir K. WOOD: The Pensions Bill applies to these contributions the ordinary provisions as to the collection of contributions under the Insurance Act, subject to any prescribed modifications. My right hon. Friend is not yet in a position to state precisely what modifications of the usual machinery of collection may be required, but it will probably be necessary to issue a special card.

Mr. H. WILLIAMS: May I ask if the Regulations to be made under the Act covering this and other points will be made before the Bill becomes law?

Sir K. WOOD: No, we have no power to make Regulations before the Bill becomes law.

Oral Answers to Questions — POOR LAW RELIEF, WEST HAM.

Mr. W. THORNE: 83.
asked the Minister of Health the number of investigating officers and relieving officers that the West Ham Board of Guardians have under their control; whether he has any complaint to make against the way in which the various relief cases are investigated; and how the scale of relief paid by the guardians compares with that of other boards of guardians of similar parishes to West Ham?

Sir K. WOOD: I understand that there are 61 investigating officers and 24 relieving officers under the control of the West Ham Board of Guardians. I cannot well discuss the second part of the question by way of Question and Answer, but my right hon. Friend cannot say that he is satisfied with the guardians' administration. The scale of relief is substantially higher than that afforded in other similar unions.

Mr. THORNE: If you are not satisfied with the investigations that take place, are you prepared to have an inquiry to see whether the investigators are doing their work properly?

Sir K. WOOD: I think the best reply to the hon. Gentleman is that the guardians have already seen my right hon. Friend, who has made various suggestions to them. I understand they desire to see him again next week, and I understand he is going to see the guardians, and we hope that they will comply with the suggestions.

Mr. J. JONES: May I ask if the hon. Gentleman thinks that 10s. a week for a man and his wife, and 5s. for each child, is too much for the guardians to give? [HON. MEMBERS: "Order, order!"] Well, that is the basis of the inquiry. We are prepared to have any inquiry you like. Why, you spend 10 "bob" on going down to Ascot.

Mr. W. THORNE: 84.
asked the Minister of Health the number of families and individual cases who were relieved by the West Ham Board of Guardians for the week ending Saturday, 8th June; and the amount of outdoor relief that was paid out for that week?

Sir K. WOOD: My right hon. Friend is informed by the guardians that particulars as to the number of families relieved are not available. The number of individual cases relieved for the week ending 6th June is reported to be 25,449, and the amount of outdoor relief paid out in that week £22,051.

Mr. THORNE: Has the hon. Gentleman seen the report, the wicked report, in the papers that 90 per cent. of the people have been relieved by the West Ham Board of Guardians?

Sir K. WOOD: No, I have not seen it.

Mr. JONES: No, but it is in one of your papers.

Mr. LANSBURY: Is the hon. Gentleman correct when he says that it is not possible to get the figure showing the number of families relieved in any one week? Is he not aware of the fact that it is a statutory duty on the part of the guardians to keep all those particulars, and that those figures are available in every union in the country?

Mr. JONES: 17,000 families in West Ham.

Sir K. WOOD: I can only state that the guardians have been applied to and that they themselves state that "particulars as to the number of families relieved are not available."

Mr. DALTON: Is the scale of relief granted in West Ham as high as the scale of relief to Super-tax payers under the Budget?

Oral Answers to Questions — ARTIFICIAL SILK INDUSTRY.

Mr. HARRIS: 85.
asked the Minister of Labour whether his list of firms engaged in artificial silk winding, bleaching, and dyeing includes all firms who do this work, or whether it is confined to those exclusively or primarily engaged on it?

The PARLIAMENTARY SECRETARY of the MINISTRY of LABOUR (Mr. Betterton): I am obliged to the hon.
Member for giving me the opportunity to explain this point. The list referred to is confined to factories and workshops appearing on the Home Office Register as being concerned exclusively or primarily with the manufacture or treatment of artificial silk. There is, no doubt, a number of other firms which undertake the winding, bleaching, or dyeing, of artificial silk, but are not exclusively or primarily engaged in dealing with this material.

Oral Answers to Questions — INTERNATIONAL LABOUR OFFICE.

Sir CLEMENT KINLOCH-COOKE: 86.
asked the Minister of Labour whether his attention has been called to the statement made in the Report from the Select Committee on Estimates in connection with the Ministry of Labour to the effect that Great Britain's share of the cost of the International Labour Organisation at Geneva amounts to 9.41 per cent. of the total, although this country has only one vote out of 54; and whether he will consider the possibility of arranging either for a reduction of our contributions or for an increase in our representation?

Mr. BETTERTON: The proportion of the British contribution to the expenses of the International Labour Office follows the general basis fixed for the League of Nations, and is as stated in the question. The league basis was settled unanimously by the assembly in 1923, with the concurrence of the British delegation. With regard to the second part of the question, I would refer my hon. Friend to the reply given to the question asked by the hon. and gallant Member for Everton (Colonel Woodcock) on 1st April. I should add that any change in the British representation would involve an amendment of the Treaty of Versailles.

BUSINESS OF THE HOUSE.

Captain BENN: With regard to the proceedings on the Finance Bill, may I ask at what stage it is proposed to take the Report of the Lace Resolution?

The PRIME MINISTER: That is the second Order, and obviously it must be taken when we have finished our discussions to-day on the Finance Bill. It
is impossible at this moment to say exactly how far we shall get, and it will depend upon the progress of business.

Mr. RAMSAY MacDONALD: Have the Government made up their mind as to how far they wish to go? The business for Wednesday and Thursday was left unannounced the other day, and since then Wednesday's business has been announced, but not the business for Thursday.

The PRIME MINISTER: Thursday is a Supply day, but we have not yet received notice of the subjects to be raised. Wednesday will be devoted to the consideration of the Finance Bill.

Lieut.-Commander KENWORTHY: Can the right hon. Gentleman say whether on Thursday we may expect a statement from the Secretary of State for Foreign Affairs, or will it be on Monday?

The PRIME MINISTER: I am sorry the Secretary of State for Foreign Affairs will not be able to return until Thursday, and I hope it will be possible for him to make a statement in the following week. I think it is very desirable that my right hon. Friend should have two or three days in this country before he makes his statement to the House.

Captain BENN: Have we seen all the Government Amendments to the Silk Schedule? I notice that the Chancellor of the Exchequer is meeting the trade on Wednesday morning.

The PRIME MINISTER: The Financial Secretary to the Treasury believes that all Amendments are down, but possibly my hon. and gallant Friend will put a question to him.

COMMUNISTS (HOME SECRETARY'S SPEECH).

Mr. BATEY: I beg to give notice that on the Adjournment to-night I shall call attention to the speech delivered by the Home Secretary last Saturday at Chats-worth in which he asked—Who was trying to prevent peace at the present time between the coalowners and the miners? The answer given was "The Socialists and the Communists." I want to raise that matter.

Orders of the Day — FINANCE BILL.

Again considered in Committee.

[Mr. JAMES HOPE in the Chair.]

CLAUSE 12.—(Income Tax for 1925–26.)

The following Amendment stood on the Order Paper in the name of Mr. LEES-SMITH:

"In page 8, line 18, to leave out the words "year 1925–26," and to insert instead thereof the words "six months beginning the sixth day of April, nineteen hundred and twenty-five."

The CHAIRMAN: The Amendment standing in the name of the hon. Member for Keighley (Mr. Lees-Smith) is one which I do not select.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Captain BENN: It was quite impossible for us to hear your ruling, Mr. Chairman, and would you kindly tell us what it was?

The CHAIRMAN: I said that the Amendment to this Clause was one which I should not select.

Captain BENN: Have you considered an Amendment handed in this morning to reduce the rate of the Income Tax from 4s. to 3s. 9d. in the £?

The CHAIRMAN: I have not received the Amendment referred to, but in view of the fact that it might very well have been placed on the Paper, it is not one which I should select.

Captain BENN: What is the right method in order to get Amendments handed in at the Table submitted to you? Do you rule my Amendment out of order?

The CHAIRMAN: I do not say the Amendment was out of order, but it is one which certainly should have been placed on the Paper.

Mr. LEES-SMITH: This Clause deals with the rate of the Income Tax and its reduction by 6d. in the £. This and the following Clause, which deals with Super-tax, we, on these benches, regard as the most important and the most objectionable in the whole of the Budget. We
attach great importance to the Debate to-day, because here are two Clauses which, more than any other, indicate the wide difference in the essential principles of finance between ourselves and the Government. The Chancellor of the Exchequer may remember that we brought up this question of the Income Tax upon the Report stage of the Budget Resolutions, but this took place at a late hour of the evening, and the Chancellor of the Exchequer on that night said that as time was so restricted he would not deal with the arguments we had put forward, and he stated that he intended to make a full declaration of his policy when the Committee stage on these Clauses was reached. I will attempt for that purpose to summarise what are our objections to the reduction in the Income Tax by 6d. in the pound. We believe that this reduction is particularly ill-conceived and ill-advised at this moment because of the peculiar conditions of British industry and British trade at the present time. As we have listened in this House to the Debate for months past on the position of unemployment and trade, a great many hon. Members have noticed a curious contradiction in the nature of the Debate.
4.0 P.M.
We have had during these last few months members rising and pointing out how deplorable and depressed are the conditions in a great number of the staple trades of the country—iron, steel, coal-mining, cotton, and so on. On the other hand—and this is where the contradiction comes in—the Chancellor of the Exchequer, when he introduced his Budget, pointed with satisfaction and pride to the fact that a penny on the Income Tax gave us a greater yield to-day than at any period in our financial history. That is a fact which wants some explanation. I suppose the explanation is that, as a matter of fact, this industrial depression is not evenly spread over the whole range of industry. For example, I believe it is practically certain now that the retail trades had a better year last year than almost any year since the close of the War. The fact seems to be that our unemployment and our trade stagnation is more or less concentrated on a group of trades—as I say, iron, steel, engineering, cotton, coal and so on—particularly that group of trades which depend for their sales upon the markets of foreign countries.
That is the position. The first point which we wish to make is this. This reduction in the Income Tax is going to be of no substantial benefit to those depressed industries, because, owing to the fact that they are not making much in the way of profit and dividends, Income Tax has ceased to be a serious problem to them for the time being. What it is going to do is to distribute millions of pounds among the interest receiving, bond-holding, and rentier class, who do not and, from the very nature of their industrial position, cannot contribute anything to the recovery of our industrial life. That is why we first of all say that this reduction of Income Tax is not only unfair as between rich and poor, but is blind and regardless of the existing needs of British industry and trade.
May I come to the chief argument used by the Chancellor of the Exchequer in defending this part of his Budget? He said that the present high rate of taxation was one of the main causes of the chill and check upon industry, and that, therefore, to reduce the taxation would be the best method of stimulating industry to another revival. Taxation, however, appears to me to be really a very minor influence affecting trade and industry. If you ask what is the cause of unemployment at the present time, the first answer is that a large proportion of our unemployment is always there. It is inherent and inevitable in the capitalistic order of society. That is one answer. The second answer is that, if you take the abnormal unemployment at the present time, it is partly due to the impoverishment and loss of purchasing power in our export markets, and it is partly due to the abnormal expansion of certain trades necessary for war which have this enormous capacity for output when the war is over. But the rate of taxation is a cause which plays only a minor part. Look at the experience on this subject. After all, the Income Tax has been reduced. It was reduced by 1s. in 1922, and it was reduced by another 6d. in 1923, and, if we read the Budget speeches of those two years, we find the same arguments used by the Chancellor of the Exchequer as the right hon. Gentleman has used this year. What has been the result of the experience we have had? After all, by this time the effect of
those reductions ought to be showing itself, and the right hon. Gentleman ought to be in the happy position of reaping the reward of them. But what is the position? The melancholy facts of the position are that every month, practically every week with one exception since the beginning of the year, the numbers of unemployed have been greater than in the corresponding week of last year, and at this moment they are not far from 200,000 more than they were last year when the Labour Government was in office.
The right hon. Gentleman in one of his speeches said that when his Government had had authority and power for three or four years they would confront us with the proved results of their doctrines It is unfortunate that at the present moment the number of unemployed is 1,250,000, and that the only proved result of these doctrines is that a certain minority of rich men have obtained a larger share of the national income than at any other time since the close of the War. I think that this doctrine that the best way of relieving unemployment and trade depression is to reduce the taxation of the wealthy, through the Income Tax and Super-tax, is one of the most mischievous and fallacious of those doctrines which are instilled in the public mind by Chambers of Commerce, Associations of Employers, and the Federation of British Industries. The fact of the matter is that when you reduce the Income Tax the great bulk of your relief about five-sixths, according to Sir Josiah Stamp, goes in those directions where the reduction of taxation has practically no effect in stimulating trade and industry. It does not stimulate your trade or your industry to reduce the Income Tax on income from War Loans, or rents, or mortgages, or debentures, or preference shares. If you wish to relieve trade and industry, you should give your assistance to those workers and employers on whom trade and industry depend, and, in particular, we believe that at this moment you should give the greatest assistance to those trades which are struggling against the greatest difficulties. Instead of that, the Chancellor of the Exchequer is giving the greatest assistance to that small section of the community who already obtain the greatest share of the national wealth.
I want to deal with one further point. In answering these arguments, the Chancellor of the Exchequer, in previous Debates, has given us a series of calculations about the proportion of direct and indirect taxation, and he has argued as a justification for his policy that the rate of direct taxation is higher now than it used to be, say, before the War. If he is going to enter into these calculations again to-day, I would ask him to deal with this fact. It is true that the rate of Income Tax bears a higher proportion to the national taxation as a whole than it did before the War, but, on the other hand, the Income Tax and Super-tax payers get out of the national expenditure a far greater proportion than they did before the War which they keep in their own pockets. In all these discussions about direct and indirect taxation we must now take into account the fact that the expenditure side of our balance sheet is abnormal. It is lop-sided because of these huge payments of £300,000,000 a year in charges on the War Debt. You cannot in these discussions ignore that fact, and you cannot ignore how it has arisen. These are payments of interest on money that was lent to the Government during the War. The major part of it was money that was made during the War, money that was made out of the War. The Government would have been perfectly entitled to have taken that money by means of taxation. Instead of doing that, they preferred to borrow it at a high rate of interest. A great injustice was done to future generations by this distinction between the treatment meted out to life and the treatment meted out to wealth, and it is a fact which we cannot ignore in the modern financial situation.
What is the result? The result is that every year £300,000,000 has to be taken to pay the interest on this War Debt. The bulk of it goes to the Income and Super-tax paying class, and, apart from their contribution to the payment of War debt, the Income Tax and Super-tax payers contribute very little indeed to the general expenditure of the country. That is the central fact which dominates the whole of our finance every year now, and that fact, I submit, renders quite obsolete and meaningless these comparisons which the Chancellor of the Exchequer has drawn between the Income Tax now and the Income Tax before the War.

Sir FREDRIC WISE: I regret very much that I cannot agree with the arguments of the hon. Member for Keighley (Mr. Lees-Smith). I listened to him about three weeks ago, and replied to him then, but I am sorry to say he was not in the House at the time. I am not going to follow him into the question of direct and indirect taxation. The great thing about Income Tax is that it is a tax on industry, efficiency and ability, and the more you earn the more you have to pay. The hon. Member stated that there was a wide difference on this point between the two parties, and I quite agree with him; there is a great difference. We on this side firmly believe that, the more you reduce the Income Tax, or even taxation generally, the better it is for trade and industry. The hon. Member states that, when you reduce the Income Tax, five-sixths of the amount goes to the larger payers of Income Tax, and does not affect trade and industry; but what happens to that money? A reduction is made, and there are only two points that you can consider; you either spend it or you save it. Nothing else can happen. Supposing that it is a case of spending it, my hon. Friend must agree that that is good for trade.

Mr. JOHNSTON: Oh!

Sir F. WISE: If the hon. Member for Dundee (Mr. Johnston) does not agree to that, he must be one of the people who save it; and what happens when you save it? Supposing that you invest that money in War Loan, surely that is good for the credit of the country? Supposing that you put it into a savings bank, that is good for the country. Supposing that you put it on deposit at a bank, the bank does not keep that money in the bank, but lends it out to industry, either on Treasury bills or in various other ways. Supposing, however, for argument's sake, that that particular amount is invested in industry by the individual who gets the reduction, surely that is an advantage to trade and industry? It must be, whether the reduction is a reduction in Income Tax or in Super-tax. Naturally, I am not going to follow the Super-tax argument. Suppose the amount had been taken off tea, instead of being a reduction in Income Tax. I am sure the hon. Member would like that to be done, as we should all like it, but would it be of benefit to the country? I think the hon. Member would
have used the argument that Indian tea companies, or tea companies in general, would have paid, perhaps, dividends of 200 per cent. instead of 100 per cent., and then he would have had a complaint to make that dividends in tea shares were too large and the profits too big. I think the right way and the best way for trade and industry is for the Income Tax to be reduced, because the money goes back into trade and industry in some shape or form
What have Income Tax payers paid since 1918–19? They have paid £2,106,000,000. If it were not for the Income Tax, this country would be insolvent; it is owing to the Income Tax that we are solvent. It is very important that we should be solvent, and anyhow it reduces costs of commodities in every way possible. If we once came into the position of not being solvent, what would happen to all our trade and commerce and industry? The more we can reduce the Income Tax, the better it is, I am perfectly certain, for industry and commerce in this country. This reduction is a relief of £24,000,000 this year, and £32,000,000 in a full year. I must leave it to the hon. Member for Keighley to suggest where that money should go. We all want a relief. The hon. Member wants a relief, just as we do on this side. He would put it, perhaps, as I suggested just now, on tea; I contend that the very best way is to reduce the Income Tax. I was reading a speech by the President of the United States recently on the Income Tax question, and this is what he stated:
An expanding prosperity requires that the largest possible amount of surplus income should be invested in. productive enterprise under the direction of the best personal ability. This will not be done if the rewards of such action are very largely taken away by taxation.
We are the highest-taxed people in the world, and I contend that a relief in the Income Tax is a benefit to trade and industry in this country.

Mr. ERNEST EVANS: Having passed from that part of the Budget which provides that in future the woman taxpayer shall pay through the hose, we now come to that part of the Budget which provides that the Income Tax payer shall pay through the nose, and I rather agree that this Budget is a disappointing Budget to those who were led to believe that relief
was to be given to the Income Tax payer—not from any feelings of sympathy with him, but from the point of view that such relief would innure to the benefit of industry at a time when all trades of the country are suffering so much. The Chancellor of the Exchequer, in introducing his Budget and in speeches since, has emphasised the fact that, in considering these proposals, we have to take them as one general proposal, so that incidents which apply here must be considered in conjunction with incidents which apply there. The Chancellor of the Exchequer pointed out that he was endeavouring in his proposals to arrive at a very careful balance of accounts, which in some cases would involve additional burdens, but that he would provide that those additional burdens should be made bearable by reliefs granted in other directions. It is in that connection, and in the light of his claim that there will be a relief to industry, that it seems to me that his proposals in regard to Income Tax really fail to come up to the expectations which he tried to create in our minds.
There is no doubt at all that the Income Tax payer in Great Britain at the present time is being called upon to pay a very heavy proportion of the taxation of the country. As I said at the start, I am not concerned so very much with the individual, but I am concerned from the point of view of the fact that I believe it does tend to hamper the industries of the country, because a greater relief in Income Tax would enable more money to be devoted to the development and extension of industry. It is for that reason that it seems to me the Chancellor of the Exchequer has been unfair in the way he has treated the Income Tax and Super-tax payer. A relief in respect of Super-tax has not nearly the same amount of justification as a relief in respect of Income Tax from the point of view of trade and industry.

The CHAIRMAN: I think it would be more convenient to take the Super-tax arguments on the next Clause.

Mr. EVANS: I quite agree, and I was not going to make any detailed examination of that question, beyond pointing out that it was not irrelevant just to mention it in passing, in support of my submission, that relief should have come in this Clause to a greater extent to the Income Tax payer. In this connection
one has to remember that other charges are in the course of this year being imposed upon the industries of the country, under the Pensions Bill. That, again, is a matter with which I cannot deal here, and which I merely mention for the purpose of emphasising the point I am making. I believe that the Chancellor of the Exchequer, in regard to the claim he has made that he has introduced a Budget which is going to assist the industries of the country, has failed to live up to that claim, in that he has not been able to give a greater relief to the Income Tax payer.
The other point I am making is that, in his praiseworthy anxiety to give relief to the Income Tax payer, he has rather diffused his generosity over various items, instead of granting a general and greater reduction in the Income Tax, which I think would be of greater benefit to the trade and industry of the country. It may be that the individual Income Tax payer who has a small income is, perhaps, to a small extent benefited—I think the right hon. Gentleman says to a large extent—but from the point of view of those who are anxious to utilise the financial arrangements of the country at the present time, in view of the great need that exists, for the purpose of facilitating the development of industries, I believe he could have utilised his generosity, if I may use that word, to a better purpose. The Report of the Inland Revenue Department for the previous financial year is full of material which is of great interest and of great value. I do not propose to enlarge upon it to any great extent on the present occasion, but it does show that the ratio of the net produce of taxation to the taxable income of the country is increasing by leaps and bounds from year to year, and, in view of the condition of trade, I do most seriously suggest that the time has come when further relief should be given, not only to the individual Income Tax payer, but also to everyone in the country, whether Income Tax payer or not, by distributing the Burden in such a way that it will free a greater amount of capital for the purpose of investment in our industries, which will ultimately benefit all classes of the community.

Sir JOHN MARRIOTT: I cordially agree with almost everything that has fallen from the hon. Member who last addressed the Committee, but I want for two or three minutes very briefly to
address myself to the argument which came from the hon. Member for Keighley (Mr. Lees-Smith). In view of the whole economic position of the Labour party, nothing amazes me more than they should object to every reduction of direct taxation. Hon. Gentlemen opposite want reductions in indirect taxation, and have made dozens of speeches to that effect; but they object to a reduction in direct taxation, and I confess that that is to me a cause of astonishment. Of course, one may approach the consideration of any given tax—and I want to consider the Income Tax this afternoon—from two points of view. One may either consider it as it affects the individual taxpayer, and the genera] equity of the system of taxation as between different classes of taxpayers; or one may consider it from the point of vew, which, to my mind, is very much the more important, of the effect of any given tax upon the industrial condition of the country as a whole.
Hon. and right hon. Gentlemen opposite will, I think, admit that I am not doing them an injustice when I say that they confine their consideration almost entirely to the effect upon the individual taxpayer. The reason why they object, as I understand they do, to a reduction in the Income Tax, is that it will, as they put it, relieve the rich at the expense of the poor. I am going to traverse that argument entirely. Of course, I admit that direct taxation has this disadvantage: it is paid by the individual, and only the payment of the tax by the individual is apparent. The remoter effects of the tax are relatively hidden, but they are not less important on that account. First of all, then, one word on the equity of the tax from the point of view of different classes of taxpayers. I am sure I do not need to point out to hon. Members opposite that for very many years past there has been a constant tendency to pile up the burden of direct taxation and to relieve the burden of indirect taxation, and for a very intelligible reason. It is the indirect taxpayers who have the votes. There are only about 2,500,000 people who actually contribute directly to Income Tax. Still, the recent tendency has been very remarkable. If you go back to the great Budgets of Sir Robert Peel, you will see that only 27 per cent. of the whole taxation of the country was at that time—I refer to 1841—raised
from direct taxation. Then go on for 20 years, to one of the greatest Budgets of Mr. Gladstone. You will find that in 1861 the proportion of direct taxation had risen to 38 per cent. Twenty years later, in 1881, it had risen to 42 per cent. Twenty years later again, in 1901, it had risen to 52 per cent., and in 1918 the direct taxpayers were contributing—I include in this figure excess profits—no less than 82 per cent. of the whole taxation of the country. Surely under these circumstances hon. Members opposite, looking at this matter from the point of view of equity—not the most important point I agree—as between different classes of texpayers, will admit that the time has come when in equity there should be some remission of direct taxation.
But I am very much more concerned, as was the hon. Member for Cardigan (Mr. E. Evans) who spoke last, to consider the matter from another point of view, namely, the effect of a high Income Tax upon industry and enterprise. It will be obvious that influence may be exercised in either or both of two ways. First of all—and I do not at all minimise the importance of this aspect of the matter—there is the psychological effect of high Income Tax rates. I believe psychologically you can do a good deal, and I believe the Chancellor of the Exchequer will find he has done a great deal to encourage enterprise and stimulate industry by the reductions which he is proposing in the Income Tax. Then there is the industrial point of view. I believe there also he will find himself justified. I recall that when the Chancellor of the Exchequer was opening his Budget he called attention to what seemed to me to be an exceedingly important point. He said:
It is an undoubted fact that the country with the highest rate of unemployment is also the country where the taxes on income are at the highest level and where at the highest level there are collected in full.
Then he put to the Committee what seemed to me to be a very pertinent question—
Are you sure that that is only a coincidence? I am sure that it is not a coincidence. Of all the remedies we are advised to apply to our industrial malady, some wise and some not wise, none is so simple, so well tried, so efficacious or so safe as the diminution of taxation falling upon
the profits of production."—[OFFICIAL REPORT, 26th April, 1925; col. 85, Vol. 183.]
I am sure that in those words we have the true apology for the reduction which the Chancellor is now proposing, and I am very cordially in agreement with him on that point. I observe that a very careful statement was made the other day on behalf of the Labour party by one who was accustomed to speak with great authority a few years ago in our Budget Debates. I remember that for a good many years in succession I had the proud privilege of following him immediately in debate and, in particular, in answering the arguments which he advanced with great lucidity and ability on the Capital Levy. He made what was obviously a very carefully considered statement on behalf of the Labour party on this question of the reduction of the Income Tax only a week or two ago.

Mr. LEES-SMITH: Who is this?

Sir J. MARRIOTT: I was referring to Lord Arnold.

Mr. SNOWDEN: He never spoke in this House.

Sir J. MARRIOTT: Never spoke in this House! I have replied to Lord Arnold in this House time after time and year after year.

Mr. SNOWDEN: Lord Arnold was never a Member of the Labour party in this House.

Sir J. MARRIOTT: I never said—at least if I did I withdraw immediately—I am not aware that I said Lord Arnold spoke in this House on behalf of the Labour party. What I said was that a week or two ago he put forward what was obviously a very well-considered statement on this question of the reduction on Income Tax, and I presume now he is entitled to speak to some extent on behalf of the party which he has joined and of whose Government he was recently a member. I do not quite understand the interruption. If I made a slip, I apologise. I desire to reply to one or two of the points which Lord Arnold made, I presume, on behalf of the party opposite. This was his argument against the reduction of Income Tax. He said:
The great bulk of the Income Tax is coming from persons whose activities will not be stimulated by a reduction in the rate of the tax.
That is almost exactly the argument which was used by the hon. Member who is just leaving the House. I am entitled, therefore, to think it is the considered argument of the party of which he is a distinguished member. What is the truth in regard to this argument? It was developed even more in another place than it was here to-day.

Mr. LEES-SMITH: On a point of Order. Is it in order for a Member of this House to answer a speech delivered in the other House?

The CHAIRMAN: My ear was occupied for the moment. No, it is not in order to reply here to a speech made in the House of Lords. I believe strictly it is not in order even to refer to speeches in another place, but, as a matter of fact, that has fallen rather into desuetude. I have not gathered that the hon. Gentleman was doing it.

Sir J. MARRIOTT: I was only referring to the speech of the Noble Lord in another place because he appeared to put precisely the arguments which have been put by the hon. and learned Gentleman opposite.

The CHAIRMAN: May I ask if there were two speeches? In the first instance, the speech a fortnight ago, I gathered, was a speech in the country? [HON. MEMBERS: "No!"] Then the reference is distinctly out of order.

Sir J. MARRIOTT: I shall not pursue that. I apologise.

Captain BENN: On a point of Order. I assume that the fact that a Noble Lord, in another place, made a speech expressing the same opinion as the hon. Member does not preclude the hon. Baronet replying to the hon. Member here.

The CHAIRMAN: Oh, no, certainly not.

Sir J. MARRIOTT: I did not think that was your ruling, and therefore I wish to address myself to the argument which fell from the hon. Member opposite. If I referred to the other speech at all, it was because I thought Lord Arnold put precisely the same argument rather more elaborately and quite as lucidly. Of course, I shall make no further reference to that speech. I return to the point that hon. Members
are constantly suggesting that, as a fact, this remission of Income Tax will not really stimulate trade in the way it is suggested it ought to. The question has been raised as to how it would affect those who invest their money in what are called fixed interest bearing securities, as, for example, debenture holders, persons who invest their money on mortgage and those who derive their income from fixed income bearing securities. I have seen it suggested that a remission of Income Tax to those people will have no effect. To my mind, that is a most amazing argument. Would any hon. Member on the benches opposite assert that the remission of taxation to those who are deriving their income from fixed income bearing securities is not likely to flow back into the channels of industry? Of course, it is. Anything which will help the investing public to save a little more will tend to go back into industry and to fertilise the channels of trade.

Mr. JOHNSTON: Will the hon. Member explain what effect upon trade and industry the remission of Income Tax to the extent of 1s. 6d. has had in the past two years?

Sir J. MARRIOTT: I can only say I think industry would have been a great deal worse had those remissions not been made. At any rate that is not an argument I want to pursue. [HON. MEMBERS: "Hear, hear!"] If hon. Members would like me to, I will, perhaps, return to it. But there is another point which has been raised and argued with a certain degree of plausibility. It is that owing to the fact that a large proportion—I think it is commonly said 80 or 90 per cent.—of our industrial and commercial capital is invested in limited liability companies, the remission of Income Tax will not find its way back to the channels of trade. That again is a most amazing argument. If a remission of taxation will assist the private business man who has his capital invested in his own individual or private business, why should it not equally stimulate industry if the remission is made to those who have their money in limited liability companies? To listen to some of the arguments which fall from those who are opposed to this remission, one would suppose that every
individual in this country was living up to the hilt of his earned income, and that every sixpence of remitted taxation would lead only to increased expenditure on his part. The hon. Member for Ilford made it clear that what did not flow back into industry would go into expenditure and stimulate trade. I am not quite sure that I am fully in accordance with my hon. Friend on that point. What I want to see is this extra sixpence going to savings and to accumulated capital. That is the way in which it may, and as I believe it will, stimulate trade. I confess that I have a bone to pick with the Chancellor of the Exchequer on that point, but I should not be in order if I embarked upon it in this discussion. I only wish, in passing, to say that it seems to me he is taking away with one hand what he gives with another.
I have examined the arguments which have been directed against this remission of Income Tax, and have tried to put myself at the point of view of those hon. and right hon. Gentlemen opposite who are opposing the remission of Income Tax in the present conditions of industry in this country and, having tried with all honesty to put myself in that point of view, I have utterly failed to understand it. To my mind, the Chancellor of the Exchequer, both on psychological grounds and on grounds which are more purely economic and industrial, is taking a step which, at any rate, may, and I believe will, have the effect of doing something to stimulate and encourage our great and harassed industries.

Mr. ATTLEE: I should like to say a few words in reply to the hon. Member for Ilford (Sir F. Wise), because he is a well-known authority on finance, and the hon. Member for York (Sir J. Marriott), because about 21 years ago I used to have to sit under him, without any chance of reply.

Sir J. MARRIOTT: You have your chance now.

Mr. ATTLEE: I think there was a certain fallacy in the argument of the hon. Member for Ilford. His argument, as I understood him, was that this remission of Income Tax was a good thing, because the amount so remitted would flow back into industry, and what did not flow back into industry would go into ex-
penditure and would, therefore, stimulate trade. I am glad to think that on that latter point there was some doubt raised in the mind of the hon. Member for York. From what the hon. Member for York said, if it does flow back into purchasing power, it is going back into the purchasing power of luxuries. This is not a time to stimulate luxury industries in this country, when the necessary industries are impoverished and many people cannot purchase the ordinary things by which they live.

Sir J. MARRIOTT: I said that I did not want to see it go back into expenditure. I want to see it go back into savings and accumulated capital.

Mr. ATTLEE: Perhaps I agree with the hon. Member, but for a different reason. Both hon. Members wish to see it flow back into industry.

Sir F. WISE: Hear, hear!

Mr. ATTLEE: Curiously enough, both hon. Members seem to be still in the mists of their old laissez faire views. Although they both believe in the direction of industry by the State, so far as they can do it by tariffs. Although they believe in stimulating key industries, they still have a beautiful and sublime trust that if they put money into the pockets of the very rich it will inevitably flow into the very best channels for the people of this country and for the whole of the country. I think that was the point which the hon. Member for York made. He thought it was very inconsistent that we should consider the individual investor. His point was that we should consider the whole country.

Sir J. MARRIOTT: Hear, hear!

Mr. ATTLEE: That particular class of the investing public look in investment for two things. In the first place, they look for the return that they are going to get and the amount of the return and, secondly, the security. That does not necessarily turn them in the direction which is going to be most helpful to the country. For instance, we had a spectacle not long ago of a flotation in the City of some extremely cheap newspapers, I think particularly noxious newspapers. I do not quite know how they are regarded on the other side. I do not know whether they are hitting the other side or whether
they are hitting the Chancellor of the Exchequer at the present time, but I do know that they help the income of one of the Chancellor of the Exchequer's colleagues in regard to his writings. I refer to the "Daily Mail" Trust. When a loan was floated in the City of London in support of those newspapers, I think it was subscribed a 100 times over. Was that one of the key industries of the country? Was it one of the most necessary things at the present time? Supposing, on the other hand, we want to float a public utility company for the benefit of the people of this country in regard to some of the things which they badly need, let us say a housing loan, at a very low rate of interest, or a London County Council loan, we do not find that the money flows so readily where it is really needed.
We are challenged from the other side as to what we would have done with the £30,000,000. The hon. Member for York said that we would have given it in remission of indirect taxation. May I offer him two other suggestions. First of all, the Government might have used the £30,000,000 towards paying off the National Debt. In that case you would have the money flowing back into industry. In the second place, I would suggest that the money if it had been retained by the Chancellor of the Exchequer might have been used as an investment in the name of the nation and not in the name of a few rich capitalists. That is a fundamental fallacy of hon. Gentlemen opposite. They always confound capital with private ownership of capital. They cannot conceive of any capital being owned except by individuals. The real poverty of this country at the present time is that it lacks the ownership of capital in public hands. There is a great deal of capital in private hands, but not nearly enough in public hands.

The CHANCELLOR of the EXCHEQUER (Mr. Churchill): As in Russia.

Sir F. WISE: Has the hon. Member looked at the trading accounts of the Government for 1923–24?

Mr. ATTLEE: Yes, and I think I know how those accounts are made up.

Sir F. WISE: They are audited.

Mr. ATTLEE: In reply to the Chancellor of the Exchequer I may say that my knowledge of Russia is not so great as his. My knowledge of Gallipoli comes from taking part in a campaign there, and his knowledge of Russia comes from the campaign which he waged against her.

The CHAIRMAN: Although the right hon. Gentleman interrupted the hon. Member, it is not very wise to develop an argument on the interruption.

Mr. ATTLEE: I apologise for being led into this digression. I do suggest that this country does need more national investments. The hon. Member for Ilford realises that. I think he is disturbed by the fact that we have a very heavy National Debt. Why should we not have national assets to set against that debt? He knows that during the past few years the weight of that debt has become greater and greater with the fall in prices, and the present Budget by the standardisation proposals is carrying on the same process, and as those prices fall the amount which is taken by the holders of fixed securities from the income of the nation waxes greater and greater. That is realised by most financiers as one of the great dangers of our financial position. There is a parallel, and that is the clog on private enterprise by the enormous mass of rentiers who take no part in industry except to take their interest. That tribute is not only swollen by war profits but by the habit of watering capital that has been done to so great an extent in the past four or five years. The class that holds these securities is the class that is being benefited by this Budget.
The hon. Member for Ilford said that it would be a very bad thing for us if we had no Income Tax payers. It would not be if the income came to the community. He seems to think that we only have real income if that income filters through the hands of the Income Tax payers. The other night I was unfortunate enough to meet a mosquito. I was fortunate enough to catch it. I found that it had consumed a certain amount of my blood. I did not need to catch the mosquito in order to know that I had blood. I prefer to retain the blood and to kill the mosquito. The truth is, that in this country, as in other capitalist countries, we have the existence of this enormous rentier class, the class which
draws money without working for it. That class tends to develop a national industry in articles of luxury instead of articles of necessity. We have the enormous burden of paying interest to this class, and the Chancellor of the Exchequer in this Budget has deliberately put money into the pockets of that class.
The hon. Member for York said that if it is a good thing to remit taxation to the man who is conducting his own business, why is it not equally good to remit taxation to a shareholder in a limited liability company? The fact is that the shareholders in a limited liability company do not do anything. You cannot stimulate the industry of a man who has nothing to do but to cut out coupons. That is not going to make the company work harder. Perhaps it will mean more dividends for the man who cuts out the coupons. If you tax him a little more, perhaps he will touch up the directors and they will make the concern work harder. The hon. Member for York said one true thing, and that was that the great mass of wealth in this country is now in the form of shares in limited liability companies. I think he said it was 83 per cent. The interest on the 83 per cent. of capital thus held will be increased by this remission of taxation, and you are doing that for an apocryphal stimulus to the remaining 17 per cent. That is bad finance. It would be bad finance at any time, but it is particularly bad finance at a time when things are as they are now.
If this remission of taxation stimulates anything it will stimulate the consumption of luxuries. Shortly after the sixpence remission of Income Tax was announced, I was travelling in the train, and I heard various people say what they would do with the remission of taxation. One person was going to invest it in a motor car. Another was going to buy a bicycle for his boy. A considerable amount of this remission of taxation will simply go in expenditure, and often it may not be expenditure in this country. There are quite a lot of patriotic people who will spend their money on the Riviera. Why is the Chancellor of the Exchequer throwing away this £30,000,000, and giving it to the least deserving class in the community? I hope the House will agree to the reduction.

5.0 P.M.

Mr. CHURCHILL: I rise in order to express the hope that we may make a substantial progress during to-day, because the new Clauses which we should discuss to-morrow, and the Schedules, undoubtedly, give rise to many questions which ought to be discussed. We are working for a general understanding to which assent has not been given to terminate by Wednesday night the Debate on the Committee stage of the Finance Bill. The Government, of course, have no other wish in the matter than to facilitate the discussion of whatever points are considered to excite the greatest amount of public interest, and whatever course the Opposition consider best to pursue with that object the Government are only anxious to meet their views, and so to arrange the course of the Debate as to enable all the points to be made effectively. In view of the work which we have to do we ought to aim at getting the Income Tax and the Super-tax and the earned income remission provisions before the dinner hour so as to enable us to deal with the Death Duties after that. [HON. MEMBERS: "No!"] That would be a very reasonable way of doing it in view of what we have to do. If, however, hon. Members would prefer to spend their time in a different way that is a matter with which the Government would not be disposed to interfere unduly.
On the subject of the reduction of Income Tax I have very little to say, because I should have thought that it was almost universally agreed outside the limits of a very small circle, that it was a good thing that there should be a reduction of Income Tax. The hon. Member for Keighley (Mr. Lees-Smith), who opened the discussion, argued that it was wrong to have any reduction at all. If his arguments were carried to their logical conclusion there never would have been any reduction in Income Tax at any period. That was not the view of the late Chancellor of the Exchequer, and it was not the view of hon. and right hon. Gentlemen opposite when they were in office. On this point I may refer to a speech by the late Chancellor of the Exchequer.

Mr. SNOWDEN: The third time.

Mr. CHURCHILL: The right hon. Gentleman says that this is the third time
that this quotation has been used. It appears to me to be such good sense, and to be one of the most interesting of the right hon. Gentleman's speeches, and one which constitutes in our opinion a most effective justification of our financial policy, that he ought not to object to its quotation, not once or twice, but if necessary 30 times. He told us, when he was Chancellor of the Exchequer, that he expected to have a statue put up to him in Throgmorton Street by the merchants of the City of London. In the course of his speech, when introducing the Budget last year, he said:
I must not be understood to imply that I anticipate the permanent maintenance of a 4s. 6d. Income Tax. What I mean is that, so far as concerns the relief I can afford to give this year, there are other taxpayers whose claims I must prefer."—[OFFICIAL REPORT 29th April, 1924; col. 1606, Vol. 172.]
But the force of a statement like that is much greater when coming from the mouth of the first Socialist Chancellor of the Exchequer and the highest authority upon finance on the Opposition benches, and coming at a time when he had at his disposal the whole of the information of the Treasury and the Departments of State. A doctrine like that does not agree with that which has been laid down by the hon. Member for Keighley. After all, the hon. Member for Keighley seems to have fallen away from grace. The right hon. Gentleman opposite indicated his perfect readiness, a readiness which almost amounted to a promise, to grant a reduction in the standard rate of Income Tax at some later period in his tenure of office. The hon. Gentleman (Mr. Attlee) who spoke last, and who was concerned with the administration of the War Office in the Labour Government, went very much further. His argument was an argument for the abolition of the capitalist system and the nationalisation of the means of production, distribution and exchange. I have no doubt that it is one which has done duty in a different form on many occasions and that it has gained for him, and will again receive, a meed of popular applause. I ventured to interject one word, and one word only, which I am bound to say appears at any rate to be relevant to those considerations which the hon. Gentleman put forward. The hon. Gentleman argued that for the greater development of State trading we
ought to put this £30,000,000 into additional State trading.

Mr. ATTLEE: I said national assets.

Mr. CHURCHILL: The hon. Member pointed out how much more powerful the national assets were for the development of national industry than assets which were in the hands of private individuals. That policy has been tried on a very much larger scale, and by people of very strong convictions in the country to which I referred. I should not like to go into this matter further, as I might be treading on dangerous ground, but it is not necessary to do so, since everyone has the results in his mind.

Mr. RILEY: Glasgow and Birmingham.

Mr. CHURCHILL: Our view is that the development of national resources is more fruitful and more rapid when private enterprise and freedom of action are permitted, within the broad limits of the law, to the citizens of the country, and if you could have an account of the unfortunate developments which followed State trading in this country, I agree with the hon. Gentleman below the Gangway that the present condition of some of the State enterprises which have been embarked upon would furnish a remarkable example of—

Captain BENN: Were not those enterprises entered into by the right hon. Gentleman's own Government?

Mr. CHURCHILL: The hon. and gallant Gentlemen's interruption is one which does not affect the argument. The argument is not who was guilty—whether it was the capitalist-minded people who formed the Coalition Government, or whether it is the party opposite. The whole question with which we are concerned is whether these enterprises of State trading do in fact produce the result which—

The CHAIRMAN: If this argument is further developed the hopes of the Chancellor of the Exchequer as to an early end of the discussion will be futile.

Mr. CHURCHILL: I will stop at once. Then the hon. Gentleman who opened the discussion has challenged the broad proposition that a diminution of taxation tends to foster and develop the trade of the country. I should have thought that that was a statement which very few
people would challenge. The relief of direct taxation undoubtedly renders sums available for the maintenance of industry and the undertaking of enterprise not within the year ahead, but for two or three years ahead, which is absolutely essential if the general prosperity of national industry is to be maintained. What we are really suffering from at present is that the whole process of building up enterprise three or four or more years ahead was interrupted by the War, and has not since been fully resumed. There is no doubt that enterprise and production are stimulated according as the national burdens resting upon capital and also upon labour are reduced. Whereas, however diminutions of indirect taxation manifest themselves by increased consumption, diminutions of direct taxation very frequently manifest themselves, at any rate to a large extent, by increased investment and enterprise. But the hon. Gentleman spoke about the relation of the rate of Income Tax to unemployment. He said, "How foolish it is to imagine that by reducing Income Tax you improve employment." The fact, however, is that the country with the highest rate of direct taxation is also the country with the highest unemployment.
That is the fact. It may be a coincidence. But when the Income Tax was reduced by 1s. and then by 6d., there was a great improvement. When the Income Tax was 6s. in the £ there were over 2¼ million persons unemployed. Now that the Income Tax has been reduced to 4s. 6d. in the £ that figure has fallen to 1¼ million people unemployed, and it would have fallen much lower but for the various improvements and relaxations carried out by the late Minister of Labour last year. It is true on paper that there has been an increase in unemployment between this year and last year. Perhaps if the right hon. Gentleman the late Chancellor of the Exchequer had carried out the policy of reducing the Income Tax last year that tendency would have been checked. At any rate it is just as open to me to argue that as it is for the right hon. Gentleman to argue the contrary. Certainly as there has been a reduction in the rate of direct taxation there has also been a steady diminution in the number of persons unemployed if you make allowance for the
relaxations made last year by the Minister of Labour.
I should have thought that no one would deny the very great increase that has been made in the burdens of the Income Tax payer during the period of the War. It is not merely a question of the rates of Income Tax having been greatly increased. The whole system of graduation has been developed and completed. But quite apart from that there has been a decline in the purchasing power of money which is represented by an increase in the nominal value. An income of £10,000 a year, for instance, purchases only about what £6,000 would have done before the War. The ratio is about 180 to 100. The whole system of Income Tax is based, not on purchasing power, but on the nominal figure. Therefore, quite apart from the increase in the rates of taxation, it is levied on an income which purchases not much more than half what it would have purchased before the War. That is a fact which must be set against some of the facts adduced by hon. Members on the other side. The burden of the Income Tax on the graduated scale has been nearly doubled by the fact that the nominal value of money has so greatly changed.
It may be asked, "Have not all classes suffered equally from this increase in the nominal value of money?" That is not so. So far as the wage-earning classes are concerned, they have succeeded in raising, during the War period, their rates of wages to a level which almost exactly corresponds with the decline in the purchasing power of money. Weekly rates of wages are now, on the average, from 70 to 75 per cent. above the pre-War rates. That compares very closely with the 80 per cent. increase in the cost of living. On the other hand it must be remembered that the standard week of work to-day is about 13 per cent. short of the pre-War standard. That is to say, that whereas a man got wages of a unit of 100 for 100 weeks' work before the War, he now gets from 170 to 175 for 87 weeks' work. I am very glad indeed that the terrible catastrophe which swept across the world has left in this country the mass of the wage-earning people with their position unimpaired in regard to many of their prime essentials. There are many aspects in which they have not suffered in the same way as the Income Tax payers.

Mr. KIRKWOOD: Would you say that to the shipbuilding trade, engineers and the miners?

Mr. CHURCHILL: In making this reduction in the standard rate of Income Tax, we are taking a step which we firmly believe will be followed by an improvement in the trade activities of the country. That improvement may not manifest itself in a month or even in a year, but that it will manifest itself over a period of time, and will lead to an improvement in the economic condition of the country I have no doubt whatever.

Mr. SNOWDEN: I did not intend to take a part in this Debate, and would not now do so but for the preliminary observations made by the Chancellor of the Exchequer. The right hon. Gentleman suggested that we might get the Income Tax Clauses before the dinner hour, and then get to the new Clauses.

Mr. CHURCHILL: To begin to-morrow.

Mr. SNOWDEN: I think the right hon. Gentleman is asking rather too much of us. Only two of my hon. Friends have so far spoken, and in view of the deep interest felt in this matter, and in view of its importance, it would be most unfair for the Debate to close before others of my hon. Friends have had an opportunity of speaking. Therefore, I suggest that we go on a little longer without any agreement or understanding. Let me offer a few observations on the matter which is now before the Committee. The earlier part of the right hon. Gentleman's speech had about as much to do with the reduction of the Income Tax as with the man in the moon. I shall try to confine myself to points which have at least some relation to the matter now being considered. If the Chancellor of the Exchequer will only repeat a few more times that quotation from my Budget speech of a year ago, he may be able to repeat it by heart. I noticed that the right hon. Gentleman was being prompted, and that this precious speech was conveyed from another part of the House to the hands of the right hon. Gentleman.

Mr. CHURCHILL: I asked for it.

Mr. SNOWDEN: The right hon. Gentleman seems to think that in that speech he has got hold of something of value, something that is in contradiction
of the attitude which my hon. Friends are now taking up on this matter. He has not, and he is quite welcome to whatever use he can make of the quotation. If his memory went back sufficiently long he would remember the controversy that took place shortly after the War on the question of a Capital Levy, when the late Mr. Bonar Law was the supporter of a Capital Levy and was supported by the Liberal party. He would remember, I suppose, that my hon. Friend the Member for West Leicester (Mr. Pethick-Lawrence) made a most interesting contribution to the question in a little book that he issued, and another hon. Member who sits behind me also wrote a book about it. If the right hon Gentleman would turn his attention for a moment from my previous speeches to the works of my hon. Friends he would find that one of the arguments for the Capital Levy was that the proceeds of a Capital Levy might be used for the reduction of Income Tax. There is no justification whatever for saying that we are opposed to a reduction of the Income Tax in all circumstances and under all conditions. What I said last year, and what I should very likely have said this year if I had been in the same position, was that I favoured reductions for the poorer classes of Income Tax payers. I was not committed for all time, nor was my party committed, to maintaining Income Tax at a flat rate of 4s. 6d. in the £. Still, at present there are other classes of tax payers whose claims must be considered first. It was most unfortunate that the right hon. Gentleman should have said what he did say in the concluding part of his speech. He said that the payers of Income Tax had suffered more than the non-payers; they had suffered by the depreciation in the purchasing power of their incomes.

Mr. CHURCHILL: Owing to the fact that the increase in the nominal value of the income means that each step of graduation is reached earlier. That has been my argument.

Mr. SNOWDEN: Yes; but the right hon. Gentleman forgets that about three years ago there was a rather drastic alteration in the scale, which gave very considerable relief to the people who had a few hundreds a year. The point of the observation of the right hon. Gentleman was that the Income Tax payer, through the depreciation of the purchasing value
of money, had suffered more than the wage-earning classes. That is not only an unfounded statement, but, if the right hon. Gentleman meant it, it was a very cruel thing to say. Any sacrifices that the richer people make through the decline in the purchasing power of money are merely sacrifices of luxury and of things which they are probably better without, but the depreciation in the value of money, when not accompanied by at least a corresponding increase in wages, means a lowering of the standard of living for the poor, and as at all times practically the whole of the wages earned by the working classes must be spent in providing physical necessities, any reduction means that they have to eat lees, that they cannot buy as many clothes, and that they have to spend less on rent. It was most unfortunate that the right hon. Gentleman should have attempted to draw the comparison.
I am not going to enter into what might be described as the main point which has been put forward this afternoon, namely, that a reduction of the Income Tax is a stimulus to trade. I will make only one observation. The right hon. Gentleman said that there had been a decrease in unemployment from the high-water mark of about 1920–21 The Chancellor of the Exchequer said it might be a mere coincidence, but it was a fact that this country, which has the highest proportion of direct taxation, has also the largest percentage of unemployed. How is it, then, that when direct taxation reached its highest point in this country there were practically no unemployed, and we had such a boom in trade as had never previously been experienced in the industrial history of this country? There had been, the right hon. Gentleman said, a slight increase of unemployment compared with a year ago. I wonder what he means by "a slight increase." He is evidently like a famous colleague who once led the Tory party, in that he does not read the newspapers. Had he done so, he would certainly have seen the appalling statement that last week there was an increase of 60,000 in the number of registered unemployed, and the further statement that the number of registered unemployed is 240,000 more to-day than it was 12 months ago. I wish to say a few
words about the point which the right hon. Gentleman made about the decreased purchasing power of money. Is he aware that two or three years ago the cost of living was about 176 points above 1913? To day it is about 80. Therefore there has been an increase in the purchasing power of money as between 176 and 80, and it is the people who spend most who reap most advantage from that fact. This has been accompanied as everybody knows by a very rapid decline in the wages of the working class, and if you compare purchasing power with wages today over the whole field of industry—I will not put it higher than to say you will see that at any rate the wage earners are no better off than they were in 1914, and if you take a great many of the industries such as mining, they are decidedly in a position very much inferior to that in which they were before the War. As I said, I am anxious that my hon. Friends behind me should have an opportunity of continuing this Debate. Therefore I will not say anything more than that we certainly do not subscribe to the contention that this reduction of Income Tax will be any stimulus to industry at all. If it were, the mere announcement of the reduction would have shown effect, but instead of doing that there has been an increase of nearly 100,000 in the number of unemployment since the right hon. Gentleman made the announcement of this reduction. The right hon. Gentleman may smile, but he cannot have it both ways. He maintains that this reduction will stimulate trade, but facts are stubborn things, and here the fact is facing the Chancellor of the Exchequer that since he made the announcement there has been no improvement in trade, but on the contrary, as the newspapers show this morning, imports and exports are down last month compared with 12 months ago, and there has been an increase last week of 60,000 in the number of unemployed.

Mr. MORRIS: The argument advanced by the Chancellor of the Exchequer is that a reduction of Income Tax means an increase in the accumulated savings of the country, and enables the Government to do something to meet the situation with regard to unemployment. That argument would be more convincing if we did not know that the Chancellor is taking £6,000,000 more out of the pockets
of the taxpayer than his predecessor was taking last year. The argument which he puts forward that if you reduce taxation sufficiently, you will then solve the unemployment problem, is deprived of its force by this fact. The hon. Member for York (Sir J. Marriott) told the Committee the history of the balance between direct and indirect taxation, and a good deal has been said from time to time about the effect of altering the balance as between one and the other. Mr. Gladstone, in introducing his great Budget of 1861, referred to this problem, and explained how he regarded these sources of taxation—
I never can think of direct and indirect taxation except as I should think of two attractive sisters introduced into the gay world of London, each with an ample fortune, both having the same parentage—for the parents of both I believe to be necessity and invention—differing only as sisters may differ, as where one is of lighter and another of darker complexion, or where there is some variety of manner, one free and open, and the other more shy, retiring, and insinuating. I cannot conceive why there should be any unfriendly rivalry between the admirers of these two damsels, and I frankly own whether it be due to a lax sense of morals or not, that, as Chancellor of the Exchequer, I have always thought it not only allowable, but even an act of duty to pay addresses to both.
The present Chancellor of the Exchequer has not only thought it allowable, but also his duty to pay his attention to both these damsels, and he has paid attention to both to such effect that he has taken from the fortune of both a sum of no less than £6,000,000 more than was taken by his predecessor in office. Yet a remission of taxation, he says, is going to give assistance to industry. How is he assisting industry when he takes this extra sum? What assistance does that render to the solution of the unemployment problem? Will it not create a greater number of unemployed? We further object to this money being taken because it is being devoted to expenditure which is in a large degree wasteful, unprofitable and of no value whatever to the country. If the Chancellor of the Exchequer is looking for opportunities of lessening the burden on the taxpayer, he could, with profit, turn his attention to the sum spent this year on armaments, which is £120,000,000. It may be argued that money spent on armaments is insurance for the safety of the country, but we have
to decide what amount of premium we should pay for that insurance. Obviously, over-insurance is as ruinous as underinsurance. If one compares the annual income of this country to-day with that for the last quarter of the nineteenth century and the amount of money spent on the defence of the country then and now, we find that the premium roughly worked out at about 2 per cent. in those days, and I do not suppose it will be suggested that there is now any greater danger of war from any quarter of Europe, or that this country is in any greater peril now than during the last years of the nineteenth century and the beginning of this century. For instance, I find that in 1875 the national income—

Mr. DALTON: We were discussing Income Tax, and many of us are anxious to continue that discussion. Is the hon. Member in order?

The CHAIRMAN: Hon. Members have been consulting me as to the business of the Committee, and as to whether certain Amendments are or are not in order. My ear was occupied at the moment. I will now listen with diligence to the hon. Member.

Mr. MORRIS: I have an Amendment on the Paper which I understand is not going to be called, and what I was submitting was that this reduction of Income Tax by 6d. in the pound does not go far enough, and that there should be a further reduction to 3s. 9d., and I was suggesting directions in which the Chancellor of the Exchequer might find means of doing so. He should give attention to the expenditure which is being authorised this year

The CHAIRMAN: The hon. Member is going into the question of alternatives. If that were to be repeated on every argument, it would lead to an endless series of discussions.

Mr. MORRIS: With great respect. Sir, I accept your ruling. I do not want to suggest an alternative, but I am pointing out that the Chancellor of the Exchequer this year is taking £6,000,000 over and above what was taken last year, and at the same time he is arguing that if you take money out of the pockets of the taxpayer, you are handicapping industry. For my part I accept the argument that remission of taxation, whether direct or indirect, is by the amount of that remission an assistance to industry, and my
point is that the right hon. Gentleman does not go far enough. I suggest that if he turned his attention to the spending Departments of the Government, he would find means of giving further remissions. If we compare the position of the taxpayer in this country with that of the taxpayer in the United States, we find a vast difference. No doubt that accounts to some extent for the difference in prosperity between the two countries. The man with an income of £500 in this country pays Income Tax to the amount of £19 2s. The American citizen in the same position is tax free. The man with a salary of £800 in this country pays £65 18s. Income Tax; the American figure is £4 10s. That is a colossal difference, and this additional burden on the industry of the country handicaps it in competition against the United States. The figures relating to the taxation of married men in Canada, United States and this country and not less interesting. The following are the proportions of Income Tax paid by married men in the three countries: United Kingdom 20 per cent., Canada 10 per cent., United States 5 per cent. These are astounding figures, and demand the attention of the Chancellor of the Exchequer. This proportion can only be adjusted, and the industry of this country given a chance if the spending departments of the Government are vigilantly observed by the Chancellor of the Exchequer.

Mr. GILLETT: In the very interesting discussion which has taken place on the income Tax, the accusation has been paid that we on this side are opposed to any reduction of Income Tax. The hon. Member for Keighley (Mr. Lees-Smith) said nothing of the kind in the speech with which he opened the Debate, but he pointed out that what we object to is the fact that Income Tax is being relieved while many other things which ought to be done are left undone. We had very prominent support of that view in a letter which appeared a few weeks ago in "The Times" from Mr. Pease, the chairman of Pease Partners, who would not be accused of being a Socialist or of being connected with our party, and he complained that the Chancellor was giving relief to the people who least needed it. In other words he was, broadly speaking, support-
ing the plea which we put forward that to relieve the Income Tax payer this time was a mistake. There is an additional mistake. Mr. Pease no doubt is very well aware in connection with his large business, that the whole Budget must be taken in connection with the new charges that are being imposed on the worker and upon industry. It would be quite impossible to try to explain to the hon. Member the Member for York (Sir J. Marriott) the arguments which we have used that relief of Income Tax does not, to a large extent, mean relief of industry. We had supplied to us in answer to questions a short time ago, figures which show that out of £260,000,000 that has to be raised this year by Income Tax, supposing the reserves that are left in business could be relieved of paying their share of Income Tax, the nation would lose about £46,000,000. If we were to take the full amount of £32,000,000, which a relief of 6d. means, the amount this represents as a relief to real business—that is in the money which is being put back again into business, or kept in business on which the company would be paying Income Tax—is something like £5,500,000 from what the Chancellor is giving. After that, I wish to suggest that, in view of the figures quoted by the hon. Member for York, in which he pointed out that about 83 per cent. of industry is now carried on by limited liability companies, you cannot be certain at all that the other £26,000,000 will necessarily go back in the relief of trade.
My reason for saying so is this: I think we often fail to recognise the great changes that are taking place throughout the business world to-day, and that have taken place in the last 50 years. In those times you had a man with a private business, and the man who made money put more of it into his business, but now, in your big concerns, you find that, generally speaking, the management is divorced from those who own the money. If I look at the banking world, with which I am most acquainted, I see that some 50 years ago you had your private banks, and at the head of them, directing the policy of the banks, were the men who owned the money. When first I went into the City of London, the men who were directing the policy of the great banks were those whose names appeared amongst the list of partners of those banks, but look
at the banking system to-day, and consider how many of the chief men who are directing the banks, the men whose names appear most prominently in the banking world, belong to the old banking families who originally started the banks. The same principle applies in all industries to-day.
Therefore, when you are organising your business, the amount of the tax becomes a secondary object to those who are really trying to make a profit. They know perfectly well that they are out to make £10,000, or £20,000, or £100,000, or as much profit as they can; they want to report to their shareholders that they have made that amount of profit, in order to justify the work they have done; and if the Government take 2s. 6d. or 4s. or 6s. as tax, they know they are in no way liable, whatever the amount of that taxation may be. Therefore, I suggest that what might in the old days have been something of an incentive to industry has to a large extent been removed, and that you have your business men who are directing industry only to a very secondary extent Income Tax payers themselves or affected by what the Income Tax may be. In the second place, as soon as a limited liability company has paid its dividend, the money has absolutely gone from the concern. It may go back in some form or other if the company puts out some appeal for money, but, generally speaking, that money has gone.
I then want to point out the next important question, and that is this: The theory in regard to Income Tax relief is that you are going to put the money back into the pockets of people who, as the hon. Member for Ilford (Sir F. Wise) said, are going to use it in what is termed savings, but I think it better to call it surplus income. Here, once again, I think we come up against the old theory that you want to have wealthy men in the country, and some 50 years ago there was a good deal to be said for the belief. You looked at a district and saw that a wealthy man brought money into that district, but to-day your joint stock system of industry has to a large extent eliminated the need for wealthy men, in the sense in which they might be said to have played their part in the organisation of society 50 years ago. To-day you have a company that wants money, but it need
not go to wealthy men for it. It makes its appeal, and you have people of all classes of society, with small or with large savings, putting their money into that concern, and there is no need for the Chancellor to try to make the rich man wealthier under the delusion that he will get more savings.
As a matter of fact, he is making the mistake of not considering who are the people who really, according to the hon. Member for Ilford, are the people who save best. You apply to the man who has an income of between £500 and £1,500, and they are the people who save more in proportion to their incomes than any other section of society. The working classes save to a certain extent, but it is doubtful whether any of them have any justification for saving, if you consider what the cost of any savings amounts to. The wealthiest classes of all certainly are not the people who save, in the sense of saving to the point of sacrifice on their part. The middle-class people are those who save most of all, and if the Chancellor of the Exchequer really wanted to give his money out to those who are likely to save, he ought to have seen it go to the pockets of the middle-class families. I am now talking about Income Tax people in the first place. The Chancellor of the Exchequer, instead of removing the 6d., might have increased the allowances to those who are bearing the responsibility of a family. In regard to education, I am not criticising those of the working classes who are unable to get the full education that they need, but I suggest that you will find to-day that those who spend the largest amount on education are the classes to whom I refer, and if the Chancellor of the Exchequer really wanted to spend his money in the best way, I suggest that he should have given his relief to those Income Tax payers who have families. When you consider the amount of relief given in regard to Income Tax to a man who has a wife, and, say, three children, as compared with the relief given to a single man, each receiving an earned income of £2,000 a year, you will find that the difference in the amount of taxation is only the small sum of £40, and you will see that we have not in any way begun to touch the question of what might be done in the way of relief for men with families.
There is another point, and a very important point, in connection with savings, upon which so much stress is laid by hon. Members opposite, and that is the very serious question as to whether the savings are going in the best direction when you have got them. This also has to do with the way in which your taxation is being levied. I think it is a mistake to hand back this money to Income Tax people, because I doubt very much whether they are the people who are most capable of using the money in the form of savings. We have had figures as to the amount of money raised on the London money market in the last five years, apart from money raised by Government loans—a sum of about £1,200,000,000. Of that amount over £500,000,000 has gone abroad. What consideration is given by those who are raising the money as to whether it is best for this country that the money should go abroad? What consideration is given by your wealthy people as to how they are putting out their money? As a matter of fact, the history of the money market is strewn with the results of investments that have failed. Large sums of money have been lost all over the world by those who are supposed by hon. Members opposite to be specially qualified to have this money under their care. Therefore, I think that this idea that the money is going back into the best hands for saving is, first of all, a mistake, because you ought to have put it in the hands or pockets of the middle classes if you wanted it saved. In the second place, I am surprised at the speech of the hon. Member for Ilford, because one would have got the idea from him that it did not matter how money was being spent. To my mind, the whole crux of the position is the manner in which you are going to spend your money.

Sir F. WISE: My point was that you could either do one thing or the other; you could either save or you could spend.

Mr. GILLETT: That is the mistake that I think the hon. Member makes. You can do that, of course, but you can spend the money well or ill, and that makes all the difference, and that is the great difference that lies between the hon. Member and us. We say that, if you put the money into the pockets of these people, many of whom will spend it on new motor cars or in some
other form of luxury—quite harmless, it may be, but luxury in some form—that is what you do not need to-day. In the first place, you want to see that any relief of taxation—and that is why we are so strongly in favour of the relief of food taxes—goes first of all to the working classes of this country, because I am fully convinced that they are the key to the whole position. The figures given by the Minister for War, in regard to the physical health of the soldiers who came up to be recruited in the Army, are the condemnation of our financial system. When we find that the Chancellor of the Exchequer comes here quite prepared to propose that the working classes should pay more for insurance, and that the business world, that can least afford it, should pay more for insurance, and then selects a set of people who are doing fairly well, at any rate, who do not specially need this relief, and, quite regardless of all the urgent claims of poverty, housing, and so forth, hands this money back to them, and says that it will act as a kind of golden shower falling upon the country, I say that it is a delusion from which the right hon. Gentleman, along with many other hon. Members of this House, is suffering. It may be a golden shower to the people who receive it, and a very pleasant and acceptable one, too, but if he believes that it is a golden shower that is going to be beneficial to the condition of trade, I believe that the Chancellor of the Exchequer is, broadly speaking, absolutely wrong, and that there are many other ways of relieving trade which would be more effective.
Why have we heard nothing about the burden on trade in regard to rates and taxes, which is an infinitely heavier burden than the Income Tax burden to-day? Rates and taxes have increased by something like £70,000,000 compared with pre-War days, and if the Chancellor of the Exchequer had been anxious to relieve the burden on industry, he would have considered the rates and the question of doing something in regard to the reserves in business. If he had been anxious that this money should go back so that it might be used for the very best purpose of all, I am certain he would have said that the first need we have in this country to-day is to give relief to those people who are not getting sufficient food or proper housing, whose children are not getting the bare necessities of life, and he would
have seen that the money was put into those quarters which would be likely to bring a, far greater harvest to this country than anything he will get by handing it back to the wealthy people to whom he proposes to hand it.

Mr. J. HUDSON: I wish to join with my colleagues in protesting against the assumption that has been made on the benches opposite and by the hon. Member for York (Sir J. Marriott) in particular, that in some way or other we are pressing, as a matter of principle, for the retention of the Income Tax at the figure at which it existed before the Chancellor of the Exchequer made his reduction. That is not so. We have been objecting to the reduction on this occasion because we have examined this proposal in relation to the general proposals of the Chancellor of the Exchequer. Had the right hon. Gentleman imposed a scheme of land taxation or increased the Super-tax or the Death Duties heavily, or had he been able to make some proposal whereby it would not have been necessary for him to impose the 4d. on the workers who contribute to the Insurance Fund and the 4d. on the employers, we might then have taken a different attitude with regard to this Income Tax.
6.0 P.M.
It is because of the way in which the Chancellor gives a special treat to his friends the hard-pressed Income Tax payers, that we make our objection, and we have tried to make it all the more forcibly because the were so many other sources from which he could have raised the money for purposes of social amelioration. I have been particularly interested duirng this Debate to observe that hon. Members, even those who have the greatest reputation as financial experts, like the hon. Member for Ilford (Sir F. Wise), in pressing their argument with regard to the relief of Income Tax being ultimately for the improvement of trade, have pressed it entirely upon purely academic and theoretical grounds, without advancing any evidence whatever from practical experience to show that there is anything in this case. I think I may say the Chancellor himself, who has discussed this matter both in this Debate and in earlier Debates, has entirely failed, although he has the Treasury behind him—and the Treasury is, I believe, of all Departments the one which would enable a Minister to
prove almost anything with the figures they are able to provide if a Minister desire to prove anything—although he has got the Treasury there to give him the facts with regard to the effects that may have been observed in the years that followed the Boer War. He has got the facts there to show what connection there is between a decreased Income Tax and an improvement in trade. There is nothing in recent years to enable him to make the statement he has done. I believe if he would turn back to the period just after the Boer War, when Income Tax was reduced, he would find then, also, that trade was particularly bad following upon the reductions that were then made.
I want to follow this argument a step further. I observed that the right hon. Gentleman smiled, apparently with a certain amount of contempt, when we suggested from these benches that the increase in unemployment observable since his Budget proposals may have some connection with this proposal with regard to Income Tax. If he will take the figures published this week of imports and exports for the month of May he will see that there has been practically a decrease all round of raw materials imported into this country. Now if manufacturers, as the result of the reduction of Income Tax, thought that trade was going to be assisted, they would have shown their hopefulness first in the raw materials they would have ordered for the next three or six months, and if they did not order them those who supply without orders being given, and who have a pretty good capacity to judge what future conditions will be, would have indicated it in the amount they sent to this country, and there would have been an increase in the raw materials that arrived.
What are the facts? Taking the important staple industry of the country for May, the raw cotton imports were down by £1,660,000; and wool imports last month were down by £2,900,000. Certainly, coming from Yorkshire as I do, representing a Yorkshire constituency, I do not see much hope in these figures of an improvement in trade in the wool industry of Yorkshire as a result of the Chancellor's proposals regarding Income Tax. The figures also show that oils and fats are down by £809,000, hides and skins by £675,000, timber by £412,000, and so on. It is with that in mind that
we have the right, surely, to ask the Chancellor of the Exchequer to give us some actual facts that would support the general statement that he and others on those benches continue to make regarding this question of the relationship of Income Tax to the development of trade. It is our opinion, backed up by some little experience, that what now takes place in industry, generally speaking, is this At the end of each year, or the end of each half-year, trading companies and trading individuals put aside, in the form of reserve funds and sinking funds, and by other expedients, the money that ultimately they propose to invest in their industries at some future date, and it is after those reserve funds, and so on, have been put on one side, that income is actually paid to those who receive it. If, therefore, you tax that income, it practically makes no difference to the amount of the reserve fund or the sinking fund. Your conditions with regard to industrial investments remain much the same, whether you take 6d. off the Income Tax or leave it on, and it is for that reason we object to the Chancellor's proposals, particularly at a time when he is imposing on unemployed workers, on people who are now at the margin of starvation, as tens of thousands of the working people of this country are, a poll tax of 4d. every week for a particular thing that may bring no benefit to them, and this time, of all times, he selects to give to the Income Tax payers the remission he has made.

Mr. HARRIS: I am not going to deal at any great length with the speech we have just heard, although I quite agree with the hon. Member (Mr. J. Hudson) that it would be much more satisfactory to have a reduction in indirect taxation. But we failed to obtain that concession, although we did our best to persuade the Chancellor of the Exchequer to give us a concession in indirect taxation. I entirely agree that reduction in prices must stimulate trade by increasing demand for all articles in general use by the people, and if we got our reduction in that form, I am sure it would have been better for industry, for trade and employment. But we failed. The Chancellor has not been prepared to listen to any arguments or any reasons. He has
dug himself in, and is not prepared to listen to any proposal of the kind. Now we have to try in other directions to get some help for the over-taxed, sorely-pressed citizen. I think it is far sounder to reduce the Income Tax in general than to reduce the Super-tax. It would stimulate trade, help industry in a far better way. I entirely agree with the hon. Member for Finsbury (Mr. Gillett), that the taxpayer can consume only one meal at a time, and the reduction of Super-tax will not be a stimulus to industry. On the other hand, when the small income is less taxed, obviously it must stimulate demand and help industry as a whole. I appreciate, however, that the Chancellor has a difficult task to raise the necessary revenue, and I rather wanted to call his attention to the second part of the Income Tax Clause provides that:
The annual value of any property which has been adopted for the purpose of Income Tax under Schedules A and B for the year 1924–25 shall be taken as the annual value of that property for the same purpose for the year 1925–26:
Provided that this Sub-section shall not apply to lands, tenements, and hereditaments in the administrative county of of London with respect to which the valuation list under the Valuation (Metropolis) Act, 1869, is, by that Act, made conclusive for the purposes of Income Tax.
The Royal Commission on Income Tax called special attention to the unsatisfactory state of the law, the very large loss of income to the Revenue, because of the particular provisions made with regard to land. I have a very shrewd suspicion that people who derive their income from land have been specially favoured for very good reasons, but what the Income Tax Commission specially recommended was that tax should be levied on income derived from land on exactly the same basis as income derived from any other source, and that is very sound at the present time. People who have their money invested in land, are not engaged in industry or trade, are drawing incomes without giving any real return to the community. On the other hand, of course, in the case of people who have invested their money in industry, there is a very good chance, if taxation be reduced, of the money they save being invested in trade and industry, giving employment.
I would point out this very important fact, that in London the Exchequer is losing a very large sum, because of this method of assessment, which is based on an Act as old as the Valuation Act of 1869. The last quinquennial valuation was made in 1920, but for the most part the assessments are based on the assessments of 1915. Consequently, in London practically none of the 40 per cent. increase obtained by landlords under the Rent Restrictions Act is available for Income Tax assessment. The loss of revenue to the Exchequer, I am informed on expert authority—and there is a very interesting article in the "Journal of the Surveyors' Institute"—runs into many millions of pounds. The London County Council appointed a committee to inquire into the matter both last year and this year, and, as a result, they passed a resolution which they sent to the Government expressing their view that gross value should be made conclusive evidence for Income Tax purposes. They passed a resolution to that effect in their desire to help the Government both this year and last year, and the Minister of Health made some reference to that. It falls particularly hard on those landlords who are not taking advantage of the possibility of raising rent. A large number of houses have been decontrolled, and, in the case of the houses that have been decontrolled, the landlords have a free hand to increase their rents over the 40 per cent. limit. That surplus is going into their pockets absolutely untaxed. If the Chancellor of the Exchequer thinks that is fair, I certainly do not. Other increments by people in business are rightly and properly subjected to taxation, but because a man invests his money in land, takes advantage of the demand and the shortness of the supply of land, he pays nothing in the way of unearned increment, and the whole of it goes into his pocket and is not taxed by the Chancellor of the Exchequer for Income Tax purposes.
If the right hon. Gentleman is looking about for new sources of revenue it would be wise, right, proper- and just to follow the recommendations of the Royal Commission on Income Tax, and make income derived from land subject to the same rate of taxation as income derived from any other source. It does give the im-
pression to the public outside—no doubt it is the wrong impression—that Governments think more of the landlords than they do of the trading interests. In centuries gone by this House of Commons has very often been spoken of as the House of Landlords. That does not apply to-day. Surely, then, it is about time that we should remove this anomaly of giving a privileged position to people who have invested their money in land as opposed to those who have risked their money in business and in trade. When the Chancellor is busily engaged at the present time looking for new sources of revenue he might consider some of these things, and at the same time do what will not discourage the people who are investing their money in business. In this connection, surely, the right and proper thing is not to impose fresh taxation, but to put the burden on the tax bearers on an equal basis, and make the taxpayer who gets his money from land subject to the same rate of Income Tax and the same taxation as other taxpayers. I hope the right hon. Gentleman will allow an Amendment to this. Meantime, I do want to make this protest, because, after all the inquiries that have been made by Royal Commissions and by experts, this reform would appear to some of us to be long overdue. If the Chancellor of the Exchequer wants to do something practical, not very showy perhaps, but which would bring millions into his coffers, here is a suggestion for him.

Mr. LANSBURY: I want, first of all, to say a word about the unemployment figures that were quoted a little while ago. It is perfectly true that a quarter of a million more men are unemployed to-day than there were this time last year. It is equally true that there are another quarter of a million of men who should be added to this number, because they have been struck off the unemployment pay book since last August. The point here that I want to make, in reply to the interjection of the hon. Gentleman opposite, the Member for Reading (Mr. H. Williams), is that although it is true to say that some of these 260,000 men that have been indicated by me have been registered, it is also quite true to say, as the hon. Gentleman knows, or should know—for we do in my constituency at any rate know it—that there is a large
proportion—90 per cent.—of those cut off who are still off and who will never have the chance of getting on again. These are the people who are 55 and 60 years of age. They have been told that they have no longer any chance of insurable employment.

Mr. H. WILLIAMS: They can register.

Mr. LANSBURY: The hon. Gentleman says they can register. What is the use of registering if they know there is neither work nor anything else for them? I am speaking of what I know from actual experience, and, therefore, the number that has been spoken about this afternoon, the large number of men, women, and young people must have a considerable number added to them in the way that I have suggested. The position is not properly represented by the figures which have been given us this afternoon. That is the first point I want to make. The next is that in all these arguments about helping trade and business by reducing Income Tax it seems to me that the people who talk that way forget that if you knock off indirect taxes that the working people pay week by week without knowing what they are paying, the money so knocked off is spent by the workpeople in buying the necessaries of life, and in thus making trade better. The woman who could save the tax she pays on sugar, tea and other things, the husband who pays on tobacco, beer and so on—these together out of whatever they might save from the reduction in indirect taxation, would buy perhaps a pair of boots one month and something else that was required the next month, and that would stimulate real trade rather than what has been suggested. I want to repeat that nobody pays Income Tax until they have got an income. I know perfectly well that taxes are levied on small incomes which I think ought not to be levied on at all. I think the scale of exemption should be much higher than it is to-day, for a variety of reasons.

Mr. MacLAREN: At the bottom.

Mr. LANSBURY: I mean, of course, at the bottom. There should be a larger class exempted because of the smallness of the income at the present time. The further point I want to make is that those who pay a large Income Tax, and even
those of us who pay a small Income Tax, should be very glad in these days if they have any income to pay a tax upon at all. I have never myself grumbled when I have had to pay Income Tax. I have been very thankful I have had an income on which to pay it. I am rather sick of hearing people who represent mainly the very rich people talk as though they ought not to be taxed in this fashion. I want to repeat what I said on the last occasion, that taxation ought to be levied according to ability to pay, and that when people are able to pay they should pay up and look happy instead of grumbling.
The other thing to which I wish to call attention is this continual talk about injuring the people at the top, this continual talk about the sacrifices the rich people have made—sacrifices of money and in other ways. It was my good fortune to stand in the Mall the other day and to watch the ladies going through. I was astonished, in this time of "hard-up-ness" to see the manner in which the women, and many of the men too, were dressed, to note the wealth of jewellery and diamonds. If I could not believe the evidence of my own eyes I can believe the evidence of the picture newspapers which are continually telling us that this season is the most gorgeous season Britain has ever had, or seen. And this in the midst of all the poverty. You have house parties being given and all sorts of extravagance in the West End which gives the lie to the suggestion that the rich are making sacrifices. They are making no sacrifice at all.
This week we shall see in the newspapers all about the brilliancy of Ascot, and this while a couple of million of people cannot get jobs to earn their bread. The well-to-do, we are told, make all these great sacrifices. These people will be out at Ascot. We shall have the Royal Procession just in the same fashion as before; and there will be people dressed and overdressed, certainly many of the women and men will be wearing clothes the cost of which would clothe scores of the very poor children of the people. When you are talking about expenditure in the country, or talking about expenditure of individuals, it is not a question of the actual spending of the money; it is how you spend it, and on what it is spent. Every penny that will be spent at Ascot, every
penny spent in connection with a drawing room or a levee, every penny spent by the rich anywhere, and every penny I spend—that I do not earn—is earned by the work folk in some way and at some time. No amount of argument will get over that. In this House some hon. Members, and the Home Secretary amongst others, talk about the horrors of Bolshevism. What will more make Bolshevists in this country than the fact that in the midst of dire poverty and destitution there is to-day a luxury which flaunts itself as it is doing in the West End of this city every day of this summer season. Any one who knows anything at all about the misery that accompanies riches in the West End—as Ruskin has somewhere said—if a man realised all the miseries that are around him he would wish to be blindfold because he could not be easy in the circumstances. Many are blind in this London of ours, because they do not realise the suffering and the destitution.
During the War luxury was taboo. During the War everybody said: "We must live plain and simple lives and not riot when other people are sacrificing health and life itself; we ought not to flaunt luxury about, we ought not to go to the moors, or to Goodwood, or to Ascot." All that was done. If this House really now believed in and felt what many of us feel as to the unemployed, and about the poverty-stricken millions of this country, we should say to ourselves that in these days there should be no such thing as luxury, no such things as levees and Goodwood and Ascot while the poor are suffering like they are at the present. It is because I feel that, that I propose to give a vote against this reduction of Income Tax and Super-tax. It is because I think that the people of this country have a right to demand from the rich and from the governing class the same standard that they put up when we were trying to beat the Germans, and that we should engage in something like the same strenuous campaign against poverty and destitution, that I am going to vote against this proposal.

Sir ALFRED MOND: I do not propose to follow the hon. Gentleman who has just sat down. His speech was better designed for a discussion on the sumptuary laws, and had not much relevance to the subject we are discussing at the present time. If Income Tax were
only paid by a small number of wealthy people in the country to-day who attended Ascot and Goodwood, we might take a different view of the proposal to take sixpence off the Income Tax. But Income Tax is paid to-day by a very large number of people whom I know cannot afford luxury, and have a difficulty in their struggle to live. We have heard arguments from both Benches to-day, which, to my mind, show an extraordinary misconception as to how Income Tax is levied. We have the hon. Member for Huddersfield (Mr. J. Hudson), in the course of his speech, telling us that a limited liability company at the end of the year or half-year puts aside certain sums that he specified. Is he unaware of the fact that a company pays Income Tax on the amount put to reserve? With Income Tax at 4s. in the £, the money cannot be put to the reserve fund, and that is one of the things which is crippling industry at the present time. The arguments we have heard, that high taxation has no effect on industry, are manifestly incorrect. I do not say that it is the best way to do it, but there is an Amendment on the Paper by which we might concentrate the Income Tax more directly on industry. Let me point to another matter which will be perhaps interesting to hon. Gentlemen who take an interest in agriculture. The farmer does not go to Goodwood, and his wife is making butter, not going about in silk dresses and dining with the rich. The farmer is paying Income Tax, and this reduction will be of great benefit to the distressed agricultural industry throughout the length and breadth of the country. It will mean that the farmer will have more capital for his business.
It is useless to contend that direct taxation, of whatever weight it is, has no effect at all on the prosperity of the country. The arguments which have been laid down by some hon. Members to-night are contrary to the whole history of taxation—canons of taxation which have lasted not for a few years, but throughout all time. It is an elementary fact, known to all who have studied the subject, that high taxation depresses enterprise and induces poverty. That has been proved not once but a hundred times in the history of the world. The reason is an obvious one. You take away from a man the stimulus to earn if the little that
remains to him is insufficient to induce him to make the effort, and that must depress enterprise. If you make the Income Tax so high that people have a feeling that the demands upon their earnings have reached the pitch where it becomes a case of "heads you win and tails I lose," they are reduced to the view that it is not worth while to make any effort, and they will place their money in securities which give them a fixed rate of interest, taking it out of industry to do so. All these things have happened and are happening. Therefore, there is a direct reason why the reduction of Income Tax is regarded as a valuable stimulus to trade. It is perfectly useless for hon. Members to get up and ask whether trade has improved since the last reduction of Income Tax. There is no sequitur there at all. They have got to prove that trade would not have been much worse if the Income Tax had not been reduced.

Mr. BATEY: It could not be worse.

Sir A. MOND: Certainly it could be worse. At one time we had 2,000,000 unemployed, and at present the figure is 1,200,000. [Interruption.] It is not so serious. A few years ago, I remember, the unemployment figures were 800,000 worse than they are to-day. Those figures are on record. Unemployment was worse and trade was worse than to-day. It cannot necessarily be demonstrated how much better or how much worse industry would have been if the Income Tax had been lower or higher, but one can assert that the lower taxation becomes the greater is the stimulus to industry. Hon. Members in the Labour party have been arguing the merits of reducing the body of taxation on large consumers as compared with more limited consumers, but if we defeat this proposal we are not relieving taxation on anybody. We are merely increasing it. If I vote for this Amendment I am not giving any reduction of food duties; I am merely refusing to afford any relief to a large body of people in this country who very badly want it and who are all consumers. Even the richest man, if you give him more money or credit, must do something with it, unless he takes it and buys gold bullion and buries it in his back garden.

Mr. LANSBURY: Puts it in China.

Sir A. MOND: Well, if he does that it will induce trade in this country. Hon. members have been arguing about redistribution. That is not the point we are arguing to-day, but whether we should reduce Income Tax or leave it where it is, not whether we should redistribute it. If we reduce Income Tax we shall increase the consumption of a considerable number of articles. Does anybody say that a man who buys a motor-car is not finding employment? He is giving a large amount of employment in a community where a good deal of industry is depressed and there are a large number of unemployed. He is providing a certain amount of work for steel makers and for other depressed industries. Some hon. Members may think it is wicked to own a motor-car, but surely they cannot object to a man finding employment for people. [Interruption.] In buying a motor-car a man might give a larger volume of employment even than if he bought other articles. Buying a motor-car might find more employment than buying boots, though boots may be more necessary than a motor-car, but the point I am making is that you cannot argue that a man furnishes no employment if he spends money on a motor-car in this country.
I want to get a clearer conception of what hon. Members on the Labour benches really think, because while pretty well all economists are agreed that a reduction of Income Tax will stimulate trade, they always look upon that as a delusion. But they never show us how it is a delusion. How can it be a delusion? If a heavy taxation depresses enterprise the relief of taxation must benefit enterprise. [Interruption.] The history of the world has proved it, and the world existed before 1913. I lay down a general canon of taxation which has existed from the time of the ancient Egyptians, and the hon. Member cannot upset history by talking of what happened in a four years' period. The general canon of taxation that heavy taxation depresses enterprise will be found in every elementary textbook.

Mr. HARDIE: May I ask why it is that the right hon. Gentleman refuses to take into consideration the figures of 1913–14 as compared with 1923–24. In 1913–14 the superabundant wealth was estimated at £951,000,000, and in 1923–24 it was
£2,300,000,000, and if his argument is correct why cannot he show that there has been more trade?

Sir A. MOND: No figures of 1913 are comparable with the figures of 1923–24 unless you reduce the figures of 1923–24 by 50 per cent. in order to get equal money value.

Mr. HARDIE: I did not think it would be necessary to have pointed this out to the hon. Member, because he has got sufficient ability to deal with figures. The figures I have given were taken out of the OFFICIAL REPORT, and I thought he would have taken sufficient interest in those figures to know that it was stated that the figure was of money reckoned as at the same value as in 1913–14. The volume of trade is practically the same, although there has been 180 per cent. increase in the money.

Sir A. MOND: I am sorry, but I cannot follow the point of the hon. Member.

Mr. HARDIE: I thought you had more acumen.

Sir A. MOND: I am sorry if my acumen is so much less than the hon. Member's, but I cannot follow exactly the point he is trying to make. I was simply stating, and it is an irrefutable proposition, that heavy taxation depresses enterprise, and therefore a lightening of taxation must increase it. Of course, there might be other countervailing factors which would make it quite possible to show that there has not been an increase of trade even though taxation has been reduced. Because other factors of a larger and bigger character have masked the process, the fact that a reduction of taxation last year has not resulted in an improvement of trade cannot be an argument to prove that the general proposition I have stated is not correct. If the hon. Gentleman had a toothache it might be no argument, if he had a much more serious disease which killed him, to say that the toothache did not. Hon. Members have admitted more than once that industries suffer if one takes away from them those large reserves which are required for development and the reserves required to meet depreciation, and it cannot be denied that a high rate of Income Tax does diminish those reserves. The hon.
Member for Huddersfield based his whole argument on a misconception of how the Income Tax was levied. I am sure he would agree that it was not a good thing that the woollen industry of Yorkshire, or any other industry, should have more than 25 per cent, of its money for building up reserves for development and for depreciation taken away from it.

Mr. J. HUDSON: My point was that the figures of the imports of raw wool since the last reduction of the Income Tax have been against the argument that the right hon. Member is putting forward that trade would improve.

Sir A. MOND: I have tried to point out three times, and I am afraid of taking up time by repeating it, that it is quite possible that, in spite of a reduction of Income Tax, the woollen industry may be more depressed than it was 10 years ago—as a result of other causes. But what would have happened if the Income Tax had been higher? Does the hon. Member say that the woollen industry would have been any better off if the Income Tax had been 19s. in the £? Obviously, that is not the case. If you believe that taking money out of an industry which otherwise would have been used for the development of that industry is a bad thing, then a high Income Tax is a bad thing, because it certainly achieves that object. It is a bad thing for the farmer, because if he had not to pay so much on his Income Tax he would have more money with which to buy artificial manures and for other purposes.
The arguments which hon. Members have been putting forward are much more applicable to the Super-tax, which I cannot discuss now, than they are to the Income Tax. We have heard denunciations of people who form a large part of the picture papers and a small part of the population, but the consideration of their incomes is not really relevant to the discussion which we have been pursuing all this time. I hope when we come to a later stage of the Budget the Chancellor of the Exchequer may see his way to apply his reduction so that it will assist in a more direct way the development of industry and the provision for depreciation, making it more certain that the money which remains in the industrial pool shall be applied to that end rather than be distributed and used for purposes
Which hon. Members submit would not be so meritorious as if it had remained within the ambit and the direct circle of industry. Even as regards the interest on War Loan, all this money must go back somewhere. Even taxes come back into industry sooner or later. The money which is taken away by taxes does not disappear into the blue, it comes back, only it comes back by a more remote and less direct channel into the trade and industry of the country [Interruption]. Yes, that is so. Taxation usually comes back very directly on to the London money market; and the less we interfere with the way in which the subject spends his money and the more freedom we give him the better it is for the community, and the quicker the response you get. From that point of view, all taxation should be as low as possible. The most prosperous countries have always been those which have had not the highest but the lowest taxation.

Mr. H. WILLIAMS: I did not intend to take part in the Debate, but I wished, while the hon. Member for Bow and Bromley (Mr. Lansbury) was speaking, to correct what I thought was a misapprehension on his part, and, as he did not give me the opportunity, I will take it now. His contention is that the number of unemployed people is vastly in excess of the figures reported week by week in the Press. He quoted figures showing that the extent of unemployment is something over 200,000 more than the corresponding figures for a year ago. The figures were perfectly correct, because they took Whitsuntide into account, whereas the previous years' figures did not. There were 60,000 persons temporarily on the roll who were not unemployed in the full sense, but had simply stood off for the Whitsuntide holiday. It has been contended that only those people entitled to benefit had registered, but I have a higher opinion of my fellow-countrymen than that. I believe people go to the Employment Exchanges to get a job, and not primarily to draw unemployment pay. If hon. Members will examine the returns, they will find the actual figures given are those registered, although not all drawing benefit.
The statistics which appeared in the April number of the "Labour Gazette,"
show all obtaining benefit from the guardians in respect of unemployment. Any hon. Member who examines these figures will come to the same conclusion as I have, that the total number of unemployed is not materially different from that given in the papers, because they always include a large number of people not totally unemployed, but working on a system of organised short time. If hon. Members will consider the various set-offs, they will find that the figures are not materially wrong. I also want to deal with, a point raised by the hon. Member for Springburn (Mr. Hardie), who quoted figures this afternoon which he has quoted before, and they have always been misleading. The hon. Member said that, in 1914, the Income Tax-payers had an income of £951,000,000. In that year, 1,200,000 persons were assessed to Income Tax.

Mr. HARDIE: I quoted my figures directly from the report. I want to know if it is in order for any hon. Member to make additions to that part of the OFFICIAL REPORT.

Mr. WILLIAMS: The hon. Member quoted from the Report of the Commissioners of Inland Revenue, from which I am now taking the estimated number of Income Taxpayers. The 1,200,000 Income Taxpayers in those statistics referred to people with incomes over £160 a year and their total income was £951,000,000. In the year 1923–24 the Income Tax-payers had an income of £2,300,000,000, but the number assessed to Income Tax was 5,000,000. The increase in the number is due to the change in the value of money and the lowering of the Income Tax limit to £135 per year.

Mr. HARDIE: I want to ask you, Captain FitzRoy, if it is in order in this House for an hon. Member to leave out the basis of my argument when he is quoting my remarks, because the figures I gave came from the Department of the Chancellor of the Exchequer?

The DEPUTY-CHAIRMAN (Captain FitzRoy): I do not think there is any point of Order involved.

Mr. HARDIE: I am being misquoted.

Mr. WILLIAMS: When these figures were being quoted by the hon. Member for Springburn, I tried to interrupt him, and I was told by an hon. Member opposite not to do so. Let us now come back
to the figures. We were told that the Income Tax-payers in 1913–14 had an income of £951,000,000, and that in 1923–24 they had £2,300,000,000; but the number of persons in 1913–14 was 1,200,000, while in 1923–24 it had increased to 5,000,000. It was most misleading for the hon. Member for Springburn to quote the figures in the way that he did. I would like to point out to those who are opposing this reduction in the Income Tax that those industries which are suffering from the most acute unemployment are those producing what are known as capital goods. You have only to analyse unemployment to find out that anything which stimulates saving brings further capital to the iron and steel industries and all industries producing capital goods, and for that reason I rejoice in the reduction of the Income Tax.

Mr. PETHICK-LAWRENCE: When the Chancellor of the Exchequer unfolded his Budget and announced a reduction of the Income Tax, I knew he was becoming very popular with hon. Members opposite, and with those hon. Members who belong to the right wing and the half-backs of the Liberal party. The Chancellor of the Exchequer made a great claim for a balance, and when it comes to a question of balancing the Income Tax, my mind goes back to the Budgets of the last few years. I remember very well, when the right hon. Gentleman the Member for Hill-head (Sir R. Home) introduced his Budget and took something off the Income Tax, he balanced it, although not completely, by a reduction of the tax on tea. When the Prime Minister in the following year was Chancellor of the Exchequer he made a further cut in the Income Tax, but he balanced that by a reduction in the tax on beer. When the right hon. Gentleman the Member for Colne Valley (Mr. Snowden) was Chancellor of the Exchequer last year he made reductions in the duties on tea and sugar, and he balanced that to some extent not by a reduction of the Income Tax but by reductions in other forms of direct taxation. For example, he took off the Corporation Profits Tax and the Inhabited House Duty, both of them taxes falling upon the income tax-paying classes
Now it has been left to the Chancellor of the Exchequer to make this cut in the Income Tax without any corresponding cut in indirect taxation. Not only this,
but the Chancellor of the Exchequer has actually put a tax on the working people in regard to artificial silk and upon their cheap lace and clocks, watches, gramophones and so on. I would like to ask how has he managed to get away with it? Simply by proclaiming that he was giving them a great boon in the shape of a Pensions Bill, when, as a matter of fact, not a single penny comes out of this Budget from the national exchequer in support of that Measure.
The Chancellor of the Exchequer defended his scheme on the ground that, although he was making these reductions in the Income Tax and the Super-tax, nevertheless the percentage of direct and indirect taxation only differed by some minute decimal point from the percentages which had been established by his predecessor the right hon. Gentleman the Member for Colne Valley. At first that sounded a very good argument, but what does it really mean? Owing to the great increase in the revenue received by persons who pay Income Tax and Super-tax, although they pay at a smaller rate, nevertheless approximately they pay the same amount. If the right hon. Gentleman had examined the amount that was left to them he would have seen that they were paying a lower rate, and that what was left to them was larger than was left to them before, and therefore what has been said on this point is really no argument at all. As a matter of fact, these particular taxpayers are richer, and, although it may be true that they are contributing nearly as much out of their increased wealth, that is no ground for arguing that they should be asked to contribute at a lower rate.
We are asked to compare the high rate of Income Tax to-day with that of 1913, but we must not forget that in between we have had a tremendous War. A great many hon. Members opposite and up and down the country are claiming that when the Income Tax went up to 6s. in the £, and the Super-tax went up accordingly, during the War the Income Tax payers were really paying for the cost of the War, and that when the War was over it was only natural that the Income Tax should be put down again—not to what it was before, but something in that direction. The real fact is that the rates of taxation levied during the War did not pay for the War at the time. Only a
miserably small proportion of the cost of the War was met at the time, and, therefore, there is an enormous burden and a huge war debt remaining on our shoulders because of the very false finance adopted during the War. It is on that account that we have to meet such heavy expenditure to-day.
It has been said, I think by the Chancellor of the Exchequer, that we are paying heavier direct taxes in this country than anywhere else in the world. The right hon. Gentleman the Member for Hillhead pointed out that the direct taxpayers had contributed £2,000,000,000 since 1918 to the revenues of this country. That is quite true, but why is it that we are having to face this enormous direct taxation, which is much greater than is being faced in any other country in Europe? I will tell the Committee why. The reason is that alone among all the belligerent countries in Europe this country has done nothing to take away directly the burden of the debt. In every other belligerent country some direct step has been taken. Russia has adopted repudiation, a principle which I have often pointed out was a false and injurious system. In Germany and Austria, they have adopted inflation to a point which practically means a confiscation of the whole of their internal debt. In France, Belgium and other countries there has been an inflation which may be regarded as a repudiation, because they have repudiated between three-fourths and four-fifths of their National Debt. Under the proposal of a Capital Levy, only one-fourth or one-third of the wealth would have been taken to get rid of our burden of debt, and I ask hon. Members to compare this with France, Belgium and Italy, where they have an inflation of four-fifths, and they have repudiated four-fifth of their debt. If you take the other countries like Czechoslovakia, Poland and Italy—

The DEPUTY-CHAIRMAN: I hope the hon. Member will not continue that discussion.

7.0 P.M.

Mr. PETHICK-LAWRENCE: In two sentences more I shall have finished. In Czechoslovakia, Poland and Italy they have got rid of their burden of debt, partly by means of the capital levy. We have done none of these things. On the contrary, we have deflated our currency, and
the burden of debt and interest is not only as great as, but greater than when the War came to an end. In consequence of that we have got this heavy direct taxation. One can put it in another way, We have got to meet the interest on the debt to the extent of £270,000,000 a year for internal interest arising from the debt. The total is £350,000,000 a year, but part goes in sinking fund, and part goes abroad. When you consider the Income Tax which the Chancellor of the Exchequer estimates will produce £262,000,000 this year, you will see that the whole proceeds of the Income Tax are to repay the interest on the debt. It is not true to imagine that the Income Tax is being used to support the public services of the country; it is being used to pay the interest on the debt. For that reason, we on these benches do not think that the Income Tax ought to have been reduced to the figure which the Chancellor of the Exchequer proposes, because the money is required not to spend on public services, but to transfer in the main to the well-to-do classes of this country in the shape of interest on the bonds that they hold.
I would like to deal with the speech of the right hon. Member for Carmarthen (Sir Alfred Mond) and with what he said with regard to reduction of taxation. No one in their senses disagrees with the general proposition that if taxes are imposed, and the money is frittered away, it is injurious to the trade and prosperity of the country. If it were proposed to put another 2s. on the Income Tax in order to use the money to throw into the sea, that would be bad for trade. If you could reduce wasteful expenditure in this country, and make use of that reduction in waste to reduce the Income Tax, that would be a great benefit to the prosperity of the country. That is not the question involved at all. We are not discussing the expenditure of the country or its character; we are discussing the form in which the money that has to be expended is to be raised. It is there we say that it is quite a mistake to suppose that the reduction in Income Tax is the right way to effect this. The hon. Member for Ilford (Sir F. Wise) said that those who receive the benefit of the reduction in Income Tax will either spend it or save it. He seemed to think that all their spending was beneficial to the country. We think that they spend a lot of money
out of this country altogether, or in a way that is not at all beneficial. With regard to providing capital, I would remind him that there is no lack of capital at the present time, because up to quite recently foreign Governments came to us and obtained a large amount of capital.
The real questions with regard to taxation are, in whose pockets the money is placed, how the taxation is going to be raised, and how it is going to be spent. If the State were to take the money from the Income Tax payers and waste it, that of course would be an injurious thing. But, if instead of reducing the Income Tax, you were to use the money in order to reduce the burden on the working people in this country, or to use it on social services, such as pensions, or on the extension of important national enterprises like the creation of a great electrical undertaking, then you would be using your money in ways much more serviceable to the community than by making a reduction in Income Tax. You would not only be doing that, but you would be helping industry. We contend that it is not the fact of taxation, but it is how you raise the taxation, and how you spend the proceeds that matters. For that reason, we are opposed to the reduction that the Chancellor of the Exchequer is proposing.

Mr. CHURCHILL: May I renew the appeal that I ventured to make to the Committee a little earlier in the afternoon. We really shall be getting into a difficulty with our business having regard to the period we are going to devote to it if we cannot bring this Debate to a close very soon, and get on to the other Clauses. We may have to sit very late to-night, or alternatively have a mass of business on our hands on Wednesday.

Mr. SNOWDEN: So far as we are concerned, we have no objection to the Division being taken now. Then we can go on to the Debate on the Super-tax, which is of very nearly the same nature.

Captain BENN: The Debate on this Clause has been unusually brief and perfectly relevant. I do not remember any Income Tax Clause that has been discussed when the Chair has selected no Amendments. I make no complaint about that. I myself handed in an Amendment to reduce the Income Tax by
3d. The right hon. Gentleman has no reason to complain of the Debate as to this arrangement to finish by a certain time; what sacro sanctity is there about it? The right hon. Gentleman is getting anxious because he has crowded the Order Paper with his own Amendments. He has to-day many Amendments put down on the Paper.

Mr. CHURCHILL: They are drafting Amendments in the main, and there is only one of importance.

Captain BENN: There are Amendments to the schedule of the silk duty, which is the important thing. The right hon. Gentleman will admit that although I do not want not to respond to what the ex-Chancellor of the Exchequer said—

Mr. CHURCHILL: Or the Chancellor of the Exchequer.

Captain BENN: I have not the same desire to follow the Chancellor of the Exchequer that was exhibited on these benches on Friday. I wish myself to make a few remarks. I do not want to take advantage of the fact that I rose on this point, and if any hon. Member rises I will sit down. The very brief observations that I wish to make on this tax are to the following effect. I believe that the best way we can check the expenditure of the Government is by refusing to permit them to levy taxes, and excessive taxes. I consider that the aggregate of taxation this year is grossly in excess of what is really wise or necessary. I would prefer to see the reduction in taxation made upon articles of consumption. All that, however, is past, and we cannot help ourselves. The Sugar Duty is a perennial; the Tea Duty is annual, and has been voted. As we cannot do what many hon. Members across the Gangway desire and get a reduction of indirect taxation, the only thing we can do is to get a reduction of direct taxation. Although my name did not appear, I was associated with the Amendment that was handed in to reduce the tax by 3d.
I would like to point out what has not been touched upon so far, that we do not know what the total sum of indirect taxation this year is going to be. The Chancellor spoke of fractions, and argued about a decimal point with the ex-Chancellor in an earlier Debate. Since the introduction of the Finance Bill a new
duty has been proposed on lace, the yield of which they will not tell us, although they have been constantly pressed. It may be that other forms of indirect taxation may be levied. There are four or five other inquiries going on—superphosphates and gas mantles, with others like iron and steel awaiting their turn. If this be the occasion to discuss the balance between direct and indirect taxation, then we are entitled to ask from the Chancellor of the Exchequer what the total burden of indirect taxation is going to be. We might at least have been told what addition has been made to the total burden by the Lace Duty. We might at least be told whether he proposes to go beyond these inquiries to an increase in indirect taxation.
My purpose is, if it were possible by a vote, to check expenditure which is wasteful by reducing the power to levy taxes. In the present time of peace we are spending £120,000,000 on armaments as against £89,000,000 before the War. I know there is an adjustment on account of prices, but the Chancellor cannot justify £120,000,000. So far as we object to new construction for the Navy which is proposed by a Cabinet Committee, we take the view that if we did not give the Government the taxation they could not build the ships. Those are some of the reasons that have actuated me and some of my friends in this matter.
If we vote against the Clause to-day, technically we abolish the Income Tax altogether. I do not know if that is the object of my hon. Friends across the Gangway, but that is the technical effect. [HON. MEMBERS: "Why?"] Because it is an annual tax. On the other hand, if we vote against the Clause we are associated with the resistance to this reduction of 6d. I, for my part, do not wish to be associated with that resistance. I would like to see an economy in expenditure which would justify an even greater reduction, but we cannot get it, although we would like to prevent the Chancellor getting his fingers on the money. Therefore, the course that I propose to take, although it may not be a very manly one, is the only logical course. I propose to cast no vote at all.

Mr. THURTLE: I want to say a word or two about this humbug as to a reduction of Income Tax stimulating
industry. We have had a long lecture from the right hon. Gentleman the Member for Carmarthen (Sir A. Mond) on the benefit that industry is going to derive from this reduction of Income Tax, and I want to inquire into that for a few moments, to see whether there is any justification for that assumption. Four or five of our great staple trades in this country are suffering very acutely from depression, and, if it were true that a reduction of Income Tax would stimulate those industries, it must be because they are short of capital. Take the great coal industry, in which there is tremendous depression; is it seriously suggested for a moment that the coal industry is looking round for further capital? Is it not the fact that the reason why the coal industry is so depressed is that there is no market for its products? Again, take the iron and steel industry, which is in a state of unparalleled depression at the present time. Is the iron and steel industry depressed because there is not sufficient capital for it? We know very well that there is an abundance of capital in this country for the iron and steel or any other industry which will provide an adequate return for that capital; but, as a matter of fact, the iron and steel industry, like the coal industry, is depressed and stagnating because there is no demand at all for the products of that industry.
We can take every industry in the country that is suffering from acute depression, and we shall find that there is absolutely no shortage of capital for it; it is simply that markets cannot be found for our products. One has only to look at the various new issues from time to time on the Stock Exchange, and see the amounts to which subscriptions are made to them, to see the humbug of this contention that industry at the present time is short of capital and needs a reduction of the Income Tax in order that that capital may be accumulated. A great issue is to take place, I believe, on Wednesday in connection with the Dunlop Rubber Company, and, although I am no prophet, I guarantee to say that, although it is only going to carry a return of, I think, 5½ per cent., that tremendous issue will be amply oversubscribed on the London Stock Exchange. In face of these facts it is sheer absurdity to say that industry is in need of this reduction of Income Tax.
I speak for the poor people of this country. The Income Tax at the present time does not affect the working man, with a wife and two children, if he is getting as much as £6 per week. I happen to represent a constituency where, I should say, there are 70,000 adult people, and I do not suppose that more than 2,000 out of those 70,000 are affected in the slightest degree by the Income Tax, because not only do they not get more than £6 a week but they get infinitely less. This reduction in Income Tax is, therefore, absolutely meaningless, so far as they are concerned. The people whom the reduction is going chiefly to affect are the holders of ordinary shares in industrial concerns, and I say that those people, in the main, have a very comfortable margin between their cost of living and their income, and if any people ought to derive benefit from a reduction of taxation, it is not those people, who have this comfortable margin between their necessaries and their income, but the very poor people who have no such margin at all.
The right hon. Gentleman the Member for Carmarthen himself, in the course of his speech—it may be that he was put off the line of his argument by interruptions—really went on to traverse the very point he had made, that this reduction in Income Tax was necessary for industry, because he said in effect that all taxation, in course of time, and sometimes almost directly, came back into industry. I would suggest to him and to the Committee in general that, if they wish to find a short and effective method by which money acquired by means of taxation can go back into industry, they can find no better method than by some great social service, such as the pensions scheme, which is going to put that money into the pockets of the ordinary wage-earners of this country, because those people do not save up their money in banks in order to invest it later on in gilt-edged stocks or industrial shares; they use this money as it comes to them, to buy the bare necessities of life, and, by the very fact that they have this extra money with which to buy those necessities, they must inevitably stimulate trade. I do not wish to detain the Committee at any length, because I know a Division is required, but I did want to make my protest against this calm assumption on the part of the great industrial magnates that we
who represent the working classes are going to accept their dictum that a reduction of Income Tax is necessary for industry We do not believe that it is necessary; we do not believe that industry is going to derive any real benefit from this reduction; but we do believe that, if you have a surplus of money coming into the national Exchequer, and want to use that surplus to the best advantage of the whole country, you can use it best by distributing it in such a way that it reaches the masses, and not a particularly small section of the community.

Mr. LLOYD GEORGE: I do not wish to prolong the Debate, but, as I propose to vote for the Clause, I should like to say one word as to why I propose to take that course. Unfortunately, owing to the forms of the House—I was not present when there was a discussion as to the Amendments, and, therefore, do not know the reasons that prompted the Chair to rule out certain Amendments, and I certainly do not in the least challenge that decision—it is impossible to raise certain issues which my hon. and gallant Friend the Member for Leith (Captain W. Benn) and others wished to raise with regard to further reductions and with regard to the method of reduction; and although, technically, the question is whether the Income Tax should be imposed or not, the real issue has taken the form of a question whether there should be a reduction of 6d. or not. I shall certainly vote in favour of the reduction of 6d. That seems to be the question underlying the Debate so far as I have heard it.
As to whether there should or should not be a reduction, I have absolutely no doubt. If the Chancellor of the Exchequer were in a position to give a reduction of 6d., it would not only be a mistake, but would be very wrong of him, not to afford that relief to the Income Tax payer. I am not going into the question of the effect of an increase of taxation upon industry; I think it depends very largely upon what you spend your money upon. You might very well spend your money in a way which would fructify and add to the development and resources of the country, and, therefore, I do not go to the extent of saying that taxation always means a depression in the power of the community
to enrich itself, and, by enriching itself, to enrich all the individuals in it. But that is not the issue now; the issue is whether upon this occasion the Chancellor ought or ought not to reduce the tax by 6d. I speak as an old Chancellor of the Exchequer, and I think the very greatest danger of a high Income Tax is that it destroys the Income Tax as a weapon for raising a great revenue. There is a limit beyond which you can not go, and, if you keep the Income Tax at a high figure when you have the means of reducing it, the result will be that in the end you will stimulate the ingenuity of the community to avoid it. That is what is happening in other countries to such an extent that Finance Ministers have always found themselves disappointed at the end of the year in their estimate of the yield. Up to the present it has not happened in this country to a very large extent, but there is no doubt that ingenuity is being stimulated, and that new methods of evasion are being cultivated. If Chancellors of the Exchequer were to give no hope to the Income Tax payer that his case would be considered, I think that would ultimately be the effect, and that the revenue would suffer from that far more than it would by an appearance from time to time of meeting his case and giving him his turn, which is all that the Chancellor of the Exchequer is doing on the present occasion. The indirect taxpayer got his turn last year and the year before, and I think the Income Tax payer has had his turn, but I think the time has come to consider his case now, and for that reason I shall vote for the Clause, because I consider the vote to be taken now is a vote in favour of a reduction of 6d.

Mr. MacLAREN: I do not want to detain the Committee very long, but I want to say from these benches that I consider that all Income Tax, if injudiciously imposed, is detrimental to industry, and whatever can be don6 to reduce Income Taxes which are detrimental to the industry of this country I would support. I merely intervene to say that in order to meet the economic arguments used by the right hon. Gentleman the Member for Carmarthen (Sir A. Mond), because the arguments he was
using, though economically sound, were rather casting reflections on the economic thinking of the party on this side of the Gangway. The hon. Member for Bow and Bromley (Mr. Lansbury) pleaded for exemption of incomes of a low standard, and I think the right hon. Gentleman forgot that during his remarks. If it be true, as the right hon. Gentleman pointed out, that taxation on industry is bad, then, surely, it is the duty of any man in this House to use whatever powers he can to remove that impost if it be detrimental to the development of the State; but, while saying that, I cannot forget that at the same time there are many other taxes which are detrimental to industry, and about which hon. Members opposite and on this side are enthusiastic. I will mention them another time.
There is just another point that was made, I think, by the right hon. Gentleman the Member for Carmarthen, upon which I should also like to touch. He said that it is not so much a question of the nature of your taxes, but really a matter of how you spend the taxation. I wish to challenge that as an economic theory which is not sound. The suggestion is that you can impose heavy taxation and fructify industry by the way in which that taxation is spent. I want to protest against that as fallacious. It is not the function of the State to over-tax industry with any benign view, and I would go so far as to say, if a beneficent Government to-morrow raised an enormous amount of money in taxation, that under the present system, while monopoly holds this country, as it does, the only thing that would ultimately be fructified would be the enormous values recorded for the land of this country. Therefore, it is not enough merely to say that we are going to consider how we are going to spend the money; we must also try to appreciate the conditions under which we would spend that money. I have, I hope, contributed something to the Debate. I daresay even some of my colleagues on these Benches will challenge what I have said, but I think after Friday's vote my heresy will be tolerated.

Question put, "That the Clause stand part of the Bill."

The Committee divided: Ayes, 296; Noes, 112.

Division No. 154.]
AYES.
[7.30 p.m.


Acland-Troyte, Lieut.-Colonel
Davies, Sir Thomas (Cirencester)
Lister, Cunliffe-, Rt. Hon. Sir Philip


Agg-Gardner, Rt. Hon. Sir James T.
Davison, Sir W. H. (Kensington, S.)
Locker-Lampson, G. (Wood Green)


Ainsworth, Major Charles
Dixey, A. C.
Locker-Lampson, Com. O. (Handsw'th)


Albery, Irving James
Doyle, Sir N. Grattan
Looker, Herbert William


Allen, J. Sandeman (L'pool, W. Derby)
Drewe, C.
Lord, Walter Greaves-


Amery, Rt. Hon. Leopold C. M. S.
Eden, Captain Anthony
Luce, Major-Gen, Sir Richard Harman


Applin, colonel R. V. K.
Edmondson, Major A. J.
Lumley, L. R.


Ashley, Lt.-Col. Rt. Hon. Wilfrid W.
Elliot, Captain Walter E.
Macdonald, Sir Murdoch (Inverness)


Astor, Maj. Hn. John J. (Kent, Dover)
Elveden, Viscount
Macdonald, Capt. P. D. (l. of W.)


Atholl, Duchess of
England, Colonel A.
Macdonald, R. (Glasgow, Cathcart)


Atkinson, C.
Erskine, Lord (Somerset, Weston-s-M.)
McDonnell, Colonel Hon. Angus


Baldwin, Rt. Hon. Stanley
Erskine, James Malcolm Monteith
Macintyre, Ian


Balfour, George (Hampstead)
Evans, Capt. Ernest (Welsh Univer.)
McLean, Major A.


Balniel, Lord
Everard, W. Lindsay
Macnaghten, Hon. Sir Malcolm


Banks, Reginald Mitchell
Fairfax, Captain J. G.
MacRobert, Alexander M.


Barclay-Harvey, C. M.
Falle, Sir Bertram G.
Maitland, Sir Arthur D. Steel-


Barnett, Major Sir Richard
Fanshawe, Commander G. D.
Malone, Major P. B.


Barnston, Major Sir Harry
Fenby, T. D.
Manningham-Buller, Sir Mervyn


Beamish, Captain T. P. H.
Fielden, E. B.
Margesson, Captain D.


Bellairs, Commander Carlyon W.
Finburgh, S.
Marriott, Sir J. A. R.


Benn, Captain Wedgwood (Leith)
Fleming, D. P.
Mason, Lieut.-Col. Glyn K.


Bennett, A. J.
Ford, P. J.
Meyer, Sir Frank


Bentinck, Lord Henry Cavendish-
Forestier-Walker, L.
Milne, J. S. Wardlaw-


Berry, Sir George
Forrest, W.
Mitchell, S. (Lanark, Lanark)


Betterton, Henry B.
Foster, Sir Harry S.
Mitchell, W. Foot (Saffron Walden)


Birchall, Major J. Dearman
Foxcroft, Captain C. T.
Mond, Rt. Hon. Sir Alfred


Bird, E. R. (Yorks, W. R., Skipton)
Fremantle, Lieut.-Colonel Francis E.
Monsell, Eyres, Com. St. Hon. B. M.


Bird, Sir R. B. (Wolverhampton, W.)
Ganzoni Sir John
Moore, Sir Newton J.


Blades, Sir George Rowland
Gates, Percy
Moreing, Captain A. H.


Boothby, R. J. G.
Gee, Captain R.
Morris, R. H.


Bourne, Captain Robert Croft.
George, Rt. Hon. David Lloyd
Morrison, H (Wilts, Salisbury)


Bowyer, Capt. G. E. W.
Gilmour, Lt.-Col. Rt. Hon. Sir John
Morrison-Bell, Sir Arthur Clive


Brass, Captain W.
Grant, J. A.
Nall Lieut.-Colonel Sir Joseph


Briggs, J. Harold
Greene, W. P. Crawford
Nelson, Sir Frank


Briscoe, Richard George
Gretton, Colonel John
Neville, R. J.


Brittain, Sir Harry
Grotrian, H. Brent
Newman, Sir R. H. S. D. L. (Exeter)


Brocklebank, C. E. R.
Guinness, Rt. Hon. Walter E.
Newton, Sir D. G. C. (Cambridge)


Brooke, Brigadier-General C. R. I.
Hacking, Captain Douglas H.
Nicholson, Col. Rt. Hn. W. G.(Ptrsf'ld.)


Broun-Lindsay, Major H.
Hall, Lieut.-Col. Sir F. (Dulwich)
Nield, Rt. Hon. Sir Herbert


Brown, Maj. D. C.(N'th'I'd., Hexham)
Hall, Capt. W. D'A. (Brecon & Rad.)
Nuttall, Ellis


Brown, Brig.-Gen. H. C. (Berks, Newb'y)
Hamilton, Sir R. (Orkney & Shetland)
Oakley, T.


Buckingham, Sir H.
Hanbury, C.
O'Connor, T. J. (Bedford, Luton)


Bull, Rt. Hon. Sir William James
Harland, A.
O'Neill, Major Rt. Hon. Hugh


Burman, J. B.
Harris, Percy A.
Ormsby-Gore, Hon. William


Butler, Sir Geoffrey
Harrison, G. J. C.
Penny, Frederick George


Cadogan, Major Hon. Edward
Hartington, Marquess of
Percy, Lord Eustace (Hastings)


Campbell, E. T.
Harvey, G. (Lambeth, Kennington)
Perkins, Colonel E. K.


Cassels, J. D.
Harvey, Major S. E. (Devon, Totnes)
Perring, William George


Cautley, Sir Henry S.
Haslam, Henry C.
Peto, G. (Somerset, Frome)


Cayzer, Sir C. (Chester, City)
Hawke, John Anthony
Phillpson, Mabel


Cayzer, Maj. Sir Herbt. R. (Prtsmth. S.)
Henderson, Capt. R.R.(Oxf'd, Henley)
Pielou, D. P.


Cecil, Rt. Hon. Sir Evelyn (Aston)
Henn, Sir Sydney H.
Pownall, Lieut.-Colonel Assheton


Chadwick, Sir Robert Burton
Henniker-Hughan, Vice-Adm. Sir A.
Preston, William


Christie, J. A.
Herbert, Dennis (Hertford, Watford)
Ramsden, E.


Churchill, Rt. Hon. Winston Spencer
Herbert, S. (York, N. R., Scar. & Wh'by)
Reid, Capt. A. S. C. (Warrington)


Churchman, Sir Arthur C.
Hilton, Cecil
Reid, D. D. (County Down)


Clarry, Reginald George
Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.
Remer, J. R.


Clayton, G. C.
Hogg, Rt. Hon. Sir D. (St. Marylebone)
Remnant, Sir James


Cobb, Sir Cyril
Holbrook, Sir Arthur Richard
Rhys, Hon. C. A. U.


Cochrane, Commander Hon. A. D.
Holland, Sir Arthur
Rice, Sir Frederick


Cohen, Major J. Brunei
Holt, Capt. H. P.
Roberts, Samuel (Hereford, Hereford)


Collins, Sir Godfrey (Greenock)
Hope, Capt. A. O. J. (Warw'k, Nun.)
Robinson, Sir T. (Lancs, Stretford)


Conway, Sir W. Martin
Hopkins, J. W. W.
Ruggles-Brise, Major E. A.


Cooper, A. Duff
Hopkinson, A. (Lancaster, Mossley)
Russell, Alexander West (Tynemouth)


Cope, Major William
Horlick, Lieut.-Colonel J. N.
Rye, F. G.


Couper, J. B.
Hudson, R.S. (Cumberl'nd, Whiteh'n)
Salmon, Major I.


Courtauld, Major J. S.
Huntingfield, Lord
Samuel, A. M. (Surrey, Farnham)


Courthope, Lieut.-Col. Sir George L.
Hurd, Percy A.
Samuel, Samuel (W'dsworth, Putney)


Cowan, D. M. (Scottish Universities)
Hutchison, Sir Robert (Montrose)
Sandeman, A. Stewart


Cowan, Sir Wm. Henry (Islington, N.)
Inskip, Sir Thomas Walker H.
Sanders, Sir Robert A.


Craik, Rt. Hon. Sir Henry
Jackson, Lieut.-Colonel Hon. F. S.
Sandon, Lord


Crawfurd, H. E.
James, Lieut.-Colonel Hon. Cuthbert
Sassoon, Sir Philip Albert Gustave D.


Croft, Brigadier-General Sir H.
Jephcott, A. R.
Savery, S. S.


Crook, C. W.
Jones, G. W. H. (Stoke Newington)
Scott, Sir Leslie (Liverp'l, Exchange)


Crookshank, Col. C. de W. (Berwick)
Jones, Henry Haydn (Merioneth)
Shaw, R. G. (Yorks, W.R., Sowerby)


Crookshank, Cpt. H.(Lindsey, Gainsbro)
Joynson-Hicks, Rt. Hon. Sir William
Shaw, Capt. W. W. (Wilts, Westb'y)


Curzon, Captain Viscount
Kidd, J. (Linlithgow)
Sheffield, Sir Berkeley


Dalkeith, Earl of
Kindersley, Major G. M.
Shepperson, E. W.


Dalziel, Sir Davison
King, Captain Henry Douglas
Simms, Dr. John M. (Co. Down)


Davidson, J. (Hertf'd, Hemel Hempst'd)
Kinloch-Cooke, Sir Clement
Simon, Rt. Hon. Sir John


Davidson, Major-General Sir John H.
Lamb, J. Q.
Sinclair, Major Sir A. (Caithness)


Davies, A. V. (Lancaster, Royton)
Lane-Fox, Colonel George R.
Skelton, A. N.


Davies, Maj. Geo. F. (Somerset, Yeovil)
Leigh, Sir John (Clapham)
Slaney, Major P. Kenyon




Smith, R.W.(Aberd'n & Kinc'dine, C.)
Thomson, F. C. (Aberdeen, South)
Wilson, Sir C. H. (Leeds, Central)


Smith-Carington, Neville W.
Thomson, Sir W. Mitchell-(Croydon, S.)
Wilson, R. R. (Stafford, Lichfield)


Smithers, Waldron
Thomson, Trevelyan (Middlesbro. W.)
Windsor-Clive, Lieut.-Colonel George


Somerville, A. A. (Windsor)
Thorne, G. R. (Wolverhampton, E.)
Winterton, Rt. Hon. Earl


Sprot, Sir Alexander
Tinne, J. A.
Wise, Sir Fredric


Stanley, Col. Hon. G. F.(Will'sden, E.)
Titchfield, Major the Marquess of
Womersley, W. J.


Stanley, Lord (Fylde)
Tryon, Rt. Hon. George Clement
Wood, B. C. (Somerset, Bridgwater)


Steel, Major Samuel Strang
Vaughan-Morgan, Col. K. P.
Wood, Rt. Hon. E. (York, W. R., Ripon)


Storry, Deans, R.
Wallace, Captain D. E.
Wood, E. (Chest'r. Stalyb'dge & Hyde


Strickland, Sir Gerald
Ward, Lt.-Col. A. L. (Kingston-on-Hull)
Wood, Sir Kingsley (Woolwich, W.).


Stuart, Hon. J. (Moray and Nairn)
Warner, Brigadier-General W. W.
Wood, Sir S. Hill- (High Peak)


Sueter, Rear-Admiral Murray Fraser
Warrender, Sir Victor
Worthington-Evans, Rt. Hon. Sir L.


Sugden, Sir Wilfrid
Wells, S. R.
Young, E. Hilton (Norwich)


Tasker, Major R. Inigo
Wheler, Major Sir Granville C. H.



Templeton, W. P.
White, Lieut.-Colonel G. Dairymple
TELLERS FOR THE AYES.—


Thomas, Sir Robert John (Anglesey)
Williams, Com. C. (Devon, Torquay)
Colonel Gibbs and Major Hennessy.


Thompson, Luke (Sunderland)
Williams, Herbert G. (Reading)





NOES.


Adamson, Rt. Hon. W. (Fife, West)
Hayday, Arthur
Salter, Dr. Alfred


Adamson, w. M. (Staff., Cannock)
Henderson, Rt. Hon. A. (Burnley)
Scrymgeour, E.


Alexander, A. V. (Sheffield, Hillsbro')
Henderson, T. (Glasgow)
Sexton, James


Ammon, Charles George
Hirst, G. H.
Shiels, Dr. Drummond


Attlee, Clement Richard
Hirst, W. (Bradford, South)
Short, Alfred (Wednesbury)


Baker, J. (Wolverhampton, Bilston)
Hudson, J. H. (Huddersfield)
Sitch, Charles H.


Baker, Walter
John, William (Rhondda, West)
Smillie, Robert


Barker, G. (Monmouth, Abertillery)
Johnston, Thomas (Dundee)
Smith, Ben (Bermondsey, Rotherhithe)


Barnes, A.
Jones, Morgan (Caerphilly)
Smith, H. B. Lees (Keighley)


Barr, J.
Kelly, W. T.
Smith, Rennie (Penistone)


Batey, Joseph
Kenyon, Barnet
Snell, Harry


Bowerman, Rt. Hon. Charles W.
Kirkwood, D.
Snowden, Rt. Hon. Philip


Bromley, J.
Lansbury, George
Stamford, T. W.


Clowes, S.
Lawson, John James
Stephen, Campbell


Cluse, W. S.
Livingstone, A. M.
Sutton, J. E.


Connolly, M.
Lowth, T.
Thomas, Rt. Hon. James H. (Derby)


Cove, W. G.
Lunn, William
Thurtle, E.


Dalton, Hugh
MacDonald, Rt. Hon. J. R. (Aberavon)
Tinker, John Joseph


Davies, Rhys John (Westhoughton)
MacLaren, Andrew
Trevelyan, Rt. Hon. C. P.


Day, Colonel Harry
Maclean, Neil (Glasgow, Govan)
Varley, Frank B.


Duncan, C.
March, S.
Viant, S. P.


Dunnico, H.
Maxton, James
Wallhead, Richard C.


Edwards. C. (Monmouth, Bedwellty)
Montague, Frederick
Watson, W. M. (Dunfermilne)


Gillett, George M.
Morrison, R. C. (Tottenham, N.)
Watts-Morgan, Lt.-Col. D. (Rhondda)


Gosling, Harry
Murnin, H.
Webb, Rt. Hon. Sidney


Graham, D. M. (Lanark, Hamilton)
Naylor, T. E.
Welsh, J. C.


Graham, Rt. Hon. Wm. (Edin., Cent.)
Palin, John Henry
Westwood, J.


Greenall, T.
Paling, W.
Wheatley, Rt. Hon. J.


Greenwood, A. (Nelson and Colne)
Parkinson, John Allen (Wigan)
Whiteley, W.


Grenfell, D. R. (Glamorgan)
Pethick-Lawrence, F. W.
Williams, David (Swansea, East)


Griffiths, T. (Monmouth, Pontypool)
Ponsonby, Arthur
Williams, T. (York, Don Valley)


Grundy, T. W.
Potts, John S.
Wilson, C. H. (Sheffield, Attercliffe)


Guest, J. (York, Hemsworth)
Richardson, R. (Houghton-le-Spring)
Wilson, R. J. (Jarrow)


Hall, F. (York, W. R., Normanton)
Riley, Ben
Windsor, Walter


Hall, G. H. (Merthyr Tydvil)
Ritson, J.
Wright, W.


Hardie, George D.
Robertson, J. (Lanark, Bothwell)
Young, Robert (Lancaster, Newton)


Hartshorn, Rt. Hon. Vernon
Robinson, W. C. (Yorks, W. R., Elland)



Hastings, Sir Patrick
Rose, Frank H.
TELLERS FOR THE NOES.—




Mr. T. Kennedy and Mr. Warne.

CLAUSE 13.—(Super-tax for 1925–26.)

The DEPUTY-CHAIRMAN (Captain FitzRoy): I do not propose to select any of the Amendments that appear on the Order Paper to this Clause. The Question therefore is "That the Clause stand part of the Bill."

Captain BENN: May I put to you, Sir, the difficulty in which many of us find ourselves. Those of us who are opposed to these reductions in the Super-tax are left with the alternative of abolishing the tax altogether, or supporting the reduction. Some of the Amendments, particularly one to which my name is attached, are specially designed to give us an
opportunity of casting a logical vote against the reductions in Super-tax. If none of the Amendments be selected, we shall either have to give a vote the result of which would be to abolish the Super-tax altogether, or else we shall have no opportunity of voting.

The DEPUTY-CHAIRMAN: It is not customary to give the Chairman's reasons for selecting Amendments. If the hon. and gallant Gentleman would like to know the particular reason in the case of the Amendment in which he is interested, it is that it would not be in order. If it were accepted by the Committee, it would impose a charge, which is not in order.

Captain BENN: I take it that the only course for hon. Members who wish to oppose the reductions in Super-tax is to vote against the Clause.

The DEPUTY-CHAIRMAN: That is so.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Mr. A. GREENWOOD: I rise to express the opposition of this side of the House to the remission of the Super-tax. We have reached in this Clause what many of us regard as the most iniquitous Clause in an iniquitous Budget. All the arguments which have been adduced against the remission of Income Tax apply with much greater force to the reduction which has been given by the Chancellor of the Exchequer to Super-taxpayers. Of all classes in the community who need relief, clearly those who need it least are those who are best off. The richer people are, apparently the more they are assisted. Not only are the Super-tax payers to enjoy the full benefit of the 6d. remission, in common with all other Income Tax payers, but they are in addition to receive a special dole of £10,000,000 a year. Yet if we take those in the higher reaches of Super-tax payers—those people with £5,000 a year or more—within the last 10 years their money income has doubled. According to the official figures for the year before the war, the total incomes of those with incomes of £5,000 a year or over was about £175,000,000. I estimate that at present the total income of people with over £5,000 per year is over £340,000,000. That means that their money incomes have doubled. The Chancellor of the Exchequer on an earlier Clause referred to the diminished purchasing power of money. The truth is, that, even if you take into account the increase that has taken place in prices during the last 10 years, the people who are in enjoyment of incomes of £5,000 a year or more are better off than they were 10 years ago. In the case of the people with £2,000 a year, their numbers have increased in the last four years, during a period of serious trade depression and during a period of falling prices. Their total income to-day is much what it was four or five years ago. Prices have fallen, but the people who are paying Super-tax on £2,000 a year or more, speaking generally, are better oft than they
were during the trade boom. There may be individuals here and there who have lost some portions of their incomes, but the facts are indisputable that the rich are as well off as, and in many cases better off than, they were before the Great War.
The Chancellor of the Exchequer has referred to wages. It is true that what he calls wages, meaning weekly wage rates for the normal working week, are to-day about 70 per cent. above what they were in 1914, but prices are about 80 per cent. above what they were in 1914. Therefore, taking the whole of labour, the real wages to-day are less than they were 10 years ago. For the information of the Chancellor of the Exchequer and the Financial Secretary to the Treasury, let me say that from 1895 onwards there had been a rise in prices which swallowed up increases in wages, and the level of real wages in 1914 stood at the same level that it did in 1895. To-day, the wages of labour, broadly speaking, are lower than they were 30 years ago, while the rich are richer, even if you take into account the rise in the cost of living.
The national income to-day, the total production which is the national income, is pretty much what it was in 1914. There has been an increase of population, which means that the national income per head is not quite so much as it was then, but the national income is much as it was 10 years ago. The proportion which labour is getting, when working full time, is less than it was 10 years ago, and you have to make this further allowance that 10 per cent. of the people are unemployed. That means that, for the time being, the share that labour is getting of the national income is down, while the proportion that is left for those who are better to do has risen. There is no relief in this Budget for the large mass of workers who to-day are suffering from low wages. There is a dole of £10,000,000 a year to those who can well afford to do without it. The Chancellor of the Exchequer, in pleading specially for Super-tax payers when referring to the importance of remitting direct taxation as a stimulus for industry, went on to say:
I believe that a moderate diminution of the burden upon wealth in the process of creation, even if that burden is to be transferred to accumulated capital passing at death, will tend to relieve the pressure upon the highly-creative faculties of the community. Such a change is in accordance
with modern conceptions, and I believe that within these limits and at this particular juncture, having regard to the special circumstances of our industrial situation and the lack of drive there seems to be in so many quarters, it will be attended by definitely recuperative symptoms." [OFFICIAL REPORT, 28th April, 1925; cols. 85–86, Vol. 183.]
It has been pointed out and has not been disproved that this expedient of relieving the well-to-do has not done anything to restore trade. It is not the slightest use dealing with particular years and then saying that on one particular day there were 2,000,000 unemployed and to-day there are only 1,250,000 unemployed. That is partly due to lower wages and it is partly due to the fall in the cost of materials. It cannot be attributed to the relief which has been given to the well-to-do. Since 1922–3 the well-to-do Income Tax payers and Super-tax payers have received as relief from Income Tax £200,000,000. That ought to have fructified industry, but its effect has been negligible, and I challenge anyone to prove any connection whatever between the state of unemployment to-day and the remission of Income Tax or Super-tax.
The Chancellor of the Exchequer referred to the highly-creative faculties of the community. Will they respond to the right hon. Gentleman's national call by this remission of Super-tax? Let us take the case of the men with £2,500 a year. They are to receive what is virtually a cheque from the Chancellor of the Exchequer of £18 15s. a year to correct the "lack of drive," and to lead the "highly-creative faculties" to do what they have always done, and what they have always been paid to do. That is not a compliment to them. I suggest that these great minds who need the stimulus of £18 15s. a year to come to the aid of the nation in its hour of trial are not worth the bribe, if that is the price we have to pay to get a response from them. The man with £3,000 a year will be given a cheque by the Chancellor of the Exchequer of £43 15s. Everybody with £5,000 a year or more will receive a gift from the Chancellor of the Exchequer of £131 5s. Is the £5,000 a year employer going to call a meeting of his board and say, "I have to-day received from a grateful Chancellor of the Exchequer a cheque for
£131 5s., which I wish to use to stimulate industry." Certainly he will not. There will be many other calls upon him. There will be the calls of home, the calls of more extravagance, the calls of longer holidays. It may be that a fraction of the money will go to fructify industry, but is there anyone who will suggest that, notwithstanding the very substantial bribe, the £5,000 a year people are going to put this money into industry in order that industry may be stimulated? It is not so. Only a fraction of it will go in that direction. The great need to-day is not for an enormous addition to the capital of the country. It is admitted that new capital is necessary and essential, but there are greater needs to-day than new capital in industry. The great need is for a little more scientific application and a little more real initiative on the part of our captains of industry. That would do immensely more than a bribe of this kind.
I wonder whether hon. and right hon. Gentlemen opposite have considered the value of the gift that is going to be made to the Super-tax payer, expressed in terms of pensions. The man with £2,500 a year, receiving his annual dole of £18 15s., is going to receive the equivalent of an orphan's allowance under the Ministry of Health Bill. The man with £3,000 a year will be able to make merry with his gift of £43 15s., which is about sufficient to pay for the pension and allowances of a widow with two children. The 25,000 people in this country with £5,000 a year or more are going to receive as a subsidy 50s. a week, which is more than many skilled men get to-day and is the equivalent of the pension of five widows. Twenty-five thousand rich men with £5,000 a year or more, in the midst of their plenty, are going to be handed over by the Chancellor of the Exchequer the equivalent of the pensions of 125,000 widows. The Chancellor of the Exchequer is giving to the 89,000 people who pay Super-tax as much in one year as he proposes out of the Exchequer to give in contributions towards widows' and orphans' pensions in 2½ years. For the money with which to provide the pensions he is going to search the pockets of the poor, and he is going to get from their pockets every year the precise amount that he is putting into the pockets of the 89,000 rich people.
8.0 P.M
The proposal to reduce Super-tax plus Income Tax is supported neither by economic theory nor by practical experience. It is a dole of the most abominable kind—a scandalous abuse of the power of Government to hand out £10,000,000 a year to a relatively small number of 89,000 people, when there are 14 times as many walking the streets, workless, and when there is to be a pensions scheme that cannot be financed except by taking out of industry, through the payments of the employers and the workers, twice as much every year as the Chancellor of the Exchequer proposes to give to the payers of Super-tax. So long as we are wasting £150,000,000 a year in England and Wales through disease alone, which is largely preventable, the right hon. Gentleman has no business to give doles to the rich. That £10,000,000 a year, devoted to the development of public health services would be immensely fruitful. We should get returns 100 fold in health, in efficiency, in productivity. That £10,000,000 a year, filtering into the pockets of the rich, a large amount of it being squandered and wasted and spent not with any productive object in view, is a gift of a most scandalous kind. If hon. and right hon. Gentlemen opposite will but consider what might have been done with that £10,000,000, they will have Very uneasy consciences when they get their cheques from the Chancellor of the Exchequer. I hope that the Committee, whatever it may feel about Income Tax, will realise that, in his zeal to help those who help him, the Chancellor of the Exchequer has gone a little too far, and if he would earn some commendation from large masses of people outside, he might do it by using some of this £10,000,000 in a way in which it would be of benefit not to private investors but to the public at large.

Mr. REID: The hon. Gentleman who has just sat down talks of a dole being given by the Chancellor of the Exchequer to those who will benefit by the proposed remission of Income Tax. The Chancellor of the Exchequer is giving nothing to these people. He is levying a certain amount from them, and to talk about a dole in such circumstances is an absolutely unjustifiable use of language.

Mr. A. GREENWOOD: It is a far more justifiable use of the word than in the case of those who receive unemployment benefit.

Mr. REID: The hon. Gentleman spoke of practical considerations. To judge from the speeches which I have heard from the Labour benches to-day—and I have heard nearly every one of them—hon. Members opposite do not show any practical acquaintance with what happens in actual business. The right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) spoke of the danger of raising the Income Tax to such a high pitch as to lead to evasion and avoidance. The Financial Secretary to the Treasury in his speech in the Debate on the Budget said that the Super-tax payer was displaying incipient signs of sore back. To anyone acquainted with what has been happening in the last few years the only wonder is that the Super-tax payer has not shown these signs much sooner. I have seen something of these people's affairs, and I made such inquiry as I could among solicitors, barristers and others, and it is safe to say that a very large proportion of Super-tax is now paid and has been paid out of capital. It is clear that if you pay tax out of capital year after year the amount of income on which tax can be paid must be less, and the State is bound to lose in this way, and it is bound to lose later on when Death Duties have to be paid, because the amount of the Death Duties must then be less.
We may say that it is wrong to pay taxes out of capital, but if a tax is levied on a man he can meet it from whatever source he wishes, and there are many people who are unable to pay the tax out of their income. The result of the War was to impose heavy taxes. A man who before the War was spending little more than half his income, and investing all the rest, found, when Income Tax and Super-tax were imposed at war rates, that practically the whole of his savings were wiped out, with the result that he had to some extent to live on his capital. It is extremely difficult at short notice for a man to alter his whole style of living, when extra taxation is imposed, without resorting to capital expenditure. If a man goes to another house, to reduce his expenditure, he has to have capital
expenditure of some sort. It cannot be said that the Income Tax and Super-tax payer is in any way in default in doing what he has done, but the fact remains that a large part of his tax is paid out of capital, and, therefore, I welcome this reduction, because it will help to make easier the payment of the tax in future years.
We have heard from the Labour Benches to-day that a reduction in the Income Tax and Super-tax did nothing to stimulate industry. The hon. Member who spoke last talked about the Super-tax payer getting a cheque for an amount which he did not put into industry. Such a conception of the way in which money is used is simply puerile. No one on this side suggests that that is the way in which the reduction of Super-tax and Income Tax go to stimulate industry. But I have seen people who are in business, when considering the question of investing money in business put down as one of the reductions from their possible profits what they will have to pay in Income Tax and Super-tax. People who invest their money in business do so in order to make money. Nearly every enterprise involves some risk, and people have to see some possible profit before they will take the risk which has to be taken.
In considering this a man does not look at the gross figure of, say, 10 per cent. profit which he is likely to receive. He will consider what is going to be the net result, and on numerous occasions I have seen things which looked as if they would be profitable turned down, because those concerned said that the net profit would not be commensurate with the risk which would have to be run. In that way these high taxes destroy the spirit of enterprise. The hon. Member said that there were as many people unemployed now as there were before. But if you are going to maintain your population you must have enterprise in industry. You must expand, and to encourage people to expand there must be an inducement. It is not a question of giving £100 to a man here and there, or anything of that kind, but it is a question of getting rid of the factors which keep people from investing in enterprise for the benefit of the nation. I hope that the Chancellor of the Exchequer will stick to his original pro-
posals, which I believe to be for the advantage of the country generally.

Mr. HILTON YOUNG: I rise to support this Clause. My opinion, I believe, is not widespread on these benches—it might be described as a local eccentricity. I think that the two last speeches have shown in a most interesting manner how it is possible to advance on this Clause the same arguments, both for and against, that were advanced on the last. I do not intend to repeat these arguments. I only turn to a single point in relation to the Super-tax payer, as a particular class of taxpayer, and his equities.
The hon. Member who opposed this Clause took an attitude as regards the Super-tax payer which is very common and very dangerous. The poor Super-tax payer never gets any sympathy. It is only too fatally easy to hold him up, as most people do, as one who is too well-off, anyhow, and who deserves no sympathy. He may deserve no sympathy on the ground of his income, but, nevertheless, any class of taxpayer is entitled to sympathy when he does not get equity. I believe that it is possible to show that in the course of the last four or five years the Super-tax payer has not had equity under our system of taxation. That is a matter which we cannot afford to disregard. It is not a question of the interests of this particular class of taxpayer, but it is of vital interest to the whole country that our system of taxation should not be unfair to any class of taxpayer, because the efficiency of our whole system of taxation depends upon the conviction in the minds of the taxpayer that it is fairly worked, and if you create a suspicion in the mind of the ordinary taxpayer that the system is not being fairly worked, even as regards a class of taxpayer very remote from himself, you make him think that perhaps he may be the next person who will suffer from inequity, and you no longer get his moral support for your system of taxation. I do not believe, even in the case of the despised class of Super-tax payer, that it is anything but necessary to preserve this principle.
I myself strongly support a strict graduation of Income Tax, I should even be prepared to consider at the right time and in the right way a steeper graduation than you have at present. But if you are going to steepen the graduation of
the Income Tax you ought to do it as a matter of deliberate policy after the most careful consideration. It would be unfair to do so at the present time, and for this reason. It is a commonplace of taxation that Income Tax and Super-tax are really but two aspects of a single tax. It is wrong to look upon them as separate taxes paid by different classes of taxpayers. They are but two branches, divisions, which affect a single scheme of graduation running from a fraction of a £ up to a maximum rate. That is the scientific aspect, if I may say so, of the true nature of Income Tax and Super-tax taken together, two branches of one tax imposed in a single scheme of graduation. What have we been doing about our scheme of graduation? Ever since 1920 we have been reducing down the basic rates of Income Tax—from 6s. to 4s. During that time we have made no reduction in the rates of Super-tax. The effect of that of course has been very shortly to steepen the graduation of the Income Tax. In the period when we have been reducing the total burden of the Income Tax we have steepened the graduation. Is that right?
I believe that there is a settled principle of taxation which shows that that is wrong. The principle is this: that at the time you are making the reduction in the total burden of the tax, you ought not to change the graduation, for the simple reason that the people who have borne the burden before the reduction should receive the relief of the reduction in the same proportion as they have borne the burden, and if you change the graduation while you reduce the burden, you give the relief in other quarters. I should say it was a sound principle of taxation that, whether you are going to steepen the graduation or whether you are going to flatten it, you should do so at a time at which you are not changing the basic rate and total burden of the tax. See how strongly and how sharply that applies to aggravate the position of the Super-tax payer in the last four years. During the War the whole burden of the Income Tax was sharply increased by the increase of the basic rate. During that time there was no great change in the graduation. But since the War, during the period of the reduction, you have been making the graduation steeper and steeper while giving no remission to Super-tax. The
consequence is that the people who bore the burden and heat of the day while the rate and the burden of Income Tax was being increased, have not been the people to receive relief in the same proportion.
I do not see how that is consistent with equity. It is most inequitable. You ought to have given relief to Super-tax payers at the same rate as to Income Tax payers. There has been an accumulating grievance on the part of the Super-tax payers during the last four years. It has by no means been removed. In the proposals now before the Committee the arrears, as it were, of relief in the rates of Super-tax are by no means made good. If there is anything in what I have said, if I have stated fairly and truly the principle of equity in taxation, the proposal made by the Chancellor of the Exchequer in this Finance Bill is a proposal in the right direction. This relief which he is giving this year he proposes to give more fairly as regards the people who have been bearing the burden before, by reducing the rates of Super-tax at the same time as he reduces the basic rate of Income Tax. Disregarded as the claims of the Super-tax payer constantly are—more perhaps on the public platform than in this House—nevertheless I urge most earnestly those who hesitate about this tax to consider the broad outlook as regards the fairness of taxation, and to ask themselves whether, as regards even this most despised class of taxpayer, it is safe to continue to inflict year by year what must appear to a not unimportant class of taxpayers to be in the nature of an inequity.

Mr. JOHNSTON: I have listened with considerable interest to the last speaker. I was surprised at the terminology which he applied to the class of Super-tax payers. He spoke about equity and of the great necessity of our securing from the Super-tax payer moral support to our system of taxation. He referred to the poor Super-tax payers as people who bore the heat and burden of the day. Never since I entered this House have I heard language more flagrantly misapplied to the subject under discussion. Who are these people who bore the heat and burden of the day? When the hon. Gentleman was speaking I took from my pocket a newspaper cutting which I have carried about for several years. It is from
a journal to which I am sure he pays considerable attention, the weekly paper called "The Nation."

Mr. YOUNG: I do not read it.

Mr. JOHNSTON: I understood that "The Nation" was a supporter of the party to which the hon. Gentleman at least pays lip service. "The Nation" at any rate declared in June, 1917, that as a result of huge lending to the Government, representing no real saving on the part of bankers and financiers,
when the War is over the propertied men of this country will be several thousand million pounds the wealthier.
That statement has been borne out by the actual facts. I have here the answer by the Chancellor of the Exchequer to a question put in this House on 20th May last. That answer shows that, while the actual income from wages, as assessed on weekly wage-earners whose total incomes exceeded the Income Tax exemption limit, was £673,000,000 in 1920, it had fallen to £491,000,000 in 1921, to £395,000,000 in 1922 and to £300,000,000 in 1923. In other words, the total income over the Income Tax exemption limit, of the wage-earning classes in this country, fell more than half during the period from 1920 to 1923. But what had happened to the incomes of the Super-tax paying class in the same period? Their estimated total income, liable to Super-tax, was, in 1920, £516,000,000; in 1921 it had risen to £564,000,000; in 1922 it had fallen slightly to £509,000,000; and in 1923 it had risen again to £510,000,000. In other words, while their incomes fell only £6,000,000 during the total period mentioned, the incomes of the working classes fell by £373,000,000. Then when an hon. Gentleman talks about equity his sole plea in equity is to find a further £10,000,000 in relief of taxation for this class of Super-tax payer.
What is the economic argument which is used in favour of this change? We have heard the argument used to-day by practically every speaker who has supported the reduction of Income Tax, namely, that if you give the Super-tax and the Income Tax payers the benefit of a reduction in taxation there will be an added fund which can be used, either as a result of saving or as a result of spend-
ing, to stimulate trade and industry. If there is anything that has been taught by the economic history of the past three or four years, when we have been reducing taxation and have taken 2s. off the In come Tax, it is surely that such relief in itself has dome nothing and can do nothing to stimulate trade and industry. An hon. Member opposite said that this proposed relief of the Super-tax payer would immediately—I think he said "immediately"—fructify in industry. If this £10,000,000 of relief will do that, may we ask him or some other hon. Member opposite to tell us where and what industry is languishing for shortage of capital? Is it coal mining; is it steel? What is it? We have not heard in this House of a single industry that is languishing for want of capital to stimulate it. But we do know that in times past, whatever may be the case now, capital savings have not always been invested wisely.
We know that savings have been invested in rum-running enterprises. We know that they have been invested in a wastage of the primary necessities of life. We know that they are invested abroad, and we heard this afternoon about millions of capital invested in China, exploiting Chinese children—seven days a week and 18 hours a day, for a wage which does not supply them with food—to compete with the products of British industry. I submit that it is an unwise use of the savings of British labour and British capital to allow certain privileged persons to export that capital where they will and as they will, and to use it in an anti-national fashion as undoubtedly many of them have done in the past. We have heard that in pre-War times the average export of British capital for investment abroad was in the neighbourhood of £200,000,000—some of it wisely invested, some of it not. We believe now about £150,000,000 is going abroad for investment, and we see, at the same time, our British Colonies unable to get loans in the London money market. Do the Government believe that our British industries are short of capital? If so, why do they not stop this capital from going abroad? If they do not believe that our industries are languishing for lack of capital, what becomes of the argument we have heard this afternoon that we must give this relief to the
Income Tax and Super-tax payers in order that trade and industry may revive?
The question which was put to us on these benches by the hon. Member for Down (Mr. Reid) was perfectly fair. He asked us, what did we propose to do with these savings in order to secure a better result for this country? I do not require to remind members of the Government that there are half a million children under the age of 15 presently engaged in industry. There are children who have entered industry in the last 12 months. If you spent this money in giving these children a maintenance of £20 per year each and allowed them to go out into the playing fields where they would be sent if they were the children of the rich or sent them to school, as hundreds of thousands of them ought to be sent to school, to complete their education—if you took them out of industry and gave the parents a £20 a year grant to keep them out of industry, you would be able to absorb the equivalent of that half million from those of our population who are now draining away sums of money under the system of what is termed the dole. What of the old men and women of 65 and over—800,000 of them—who are in industry to-night and who, having borne the heat and burden of the day, having done their bit, are yet compelled to slave year after year until death takes them. These two classes, the infants and the old people, taken together represent 1,300,000—more than the total number of registered unemployed—and if the Government, instead of relieving a class, many of whom did not want it and did not ask for it, instead of relieving the Super-tax rich with £10,000,000 and throwing away £32,000,000 in relief of Income Tax, had taken this £42,000,000 and devoted it to getting the children and the aged out of industry and giving a maintenance grant for the children and pensions for the aged, then the £42,000,000 would have been spent in this country on stimulating trade and adding to the purchasing power of the people, enabling them to buy more clothes, boots, crockery, furniture, everything. Not one penny would have been invested abroad in anti-national enterprises. The method taken by the Government of relieving the Super-tax rich will add to the miseries and discontents presently among us.
Along that road there is no escape. Unless we can increase the purchasing power of the common folk of this land, unless we can give the common people, as we call them, greater power to buy food, clothing and shelter for themselves, there is no possible way out of the miasma of trouble and despair that has settled upon millions of the people of this country. For these reasons I oppose relief to the Super-tax payer.

Sir EVELYN CECIL: If I wished to reply to the hon. Gentleman who has just sat down, I think it would be fair to suggest that since the post-War Budgets and the Budgets just at the end of the War the Super-tax payers of all taxpayers have never had any remission. All other taxes have been reduced, but the Super-tax has remained as it was. I have risen, however, to make a different point, which is, I think, one of substance, and it is based on a. statement which the Chancellor of the Exchequer made in his Budget speech. After announcing that ho was going to increase the Death Duties the right hon. Gentleman said he therefore proposed to reduce Super-tax in as nearly as possible a corresponding proportion over as nearly as possible the same range of taxpayers and to approximately the same extent. My point is that the remission of Super-tax and the corresponding addition to Death Duties taken together represent thoroughly unsound finance. The two proposals stand or fall together, and I should like to induce the Chancellor to cancel both. I feel that in urging this point of view I I am not expressing my own opinion alone but also that of a number of highly qualified people in the Conservative party and in the Liberal party, and, for aught I know, even of many Members of the Labour party, unless they are still dabbling with the idea of a capital levy. I cannot believe, as a broad principle, that it is sound finance to tax capital through higher Death Duties in order to diminish charges on revenue through lowering the Super-tax.
If I may put the matter more simply, broadly speaking, it cannot be right to place a charge on capital to meet ordinary expenditure, or, I might say, it cannot be wise to take the capital of private persons or of public bodies and to treat it as national income. You do not do these things in private businesses, and
I do not know why it should be done by the State. I should never dream of suggesting to any private business that I could influence that we should charge capital in order to relieve revenue. That is not the way to do things, and I confess to some surprise that any Chancellor of the Exchequer should, unless under most exceptional circumstances, take upon himself to make these combined proposals. There is, it is true, one exception which might justify, in my view, such proposals being made, and that would be if the position was one of great emergency and that the taxation of capital was applied to the redemption of capital, that is to say, the redemption of the National Debt, but, as a matter of fact, I do not think my right hon. Friend is doing anything of the kind. He said, in his Budget speech, that he was taking £10,000,000 off Super-tax and putting the same amount on the Death Duties.
Well qualified persons who have calculated the effect of these things maintain, some of them, that he is really get-ting out of the Death Duties £16,500,000 more than is required for the Prime Minister's £50,000,000 annual Sinking Fund by these new proposals. I do not approve of that £16,500,000 being taken in. this way, partly because I think the Death Duties, in all conscience, are quite high enough, but partly also because, unless the sum is going to the reduction of the National Debt, the finance is quite unsound. As one highly qualified critic put it to me, he himself would never have made these proposals, but if they were to be persisted in, he strongly urged that the additional Death Duties should be earmarked to pay off the National Debt. I do not know whether the Chancellor is prepared so to earmark them. That might afford some justification of his general proposals, but even then I confess, in my own mind, a considerable anxiety, because we have heard from time immemorial in British financial history of raids upon sinking funds, and however often you may earmark a sinking fund for a particular purpose, there is no guarantee whatever, either that the existing Chancellor of the Exchequer or some successor of his will not raid that sinking fund and the Death Duties for other than capital redemption of debt.
My other cause of anxiety is that, if you are going to increase the Death Duties in this manner, where are you going to stop? I have always opposed the Capital Levy. I have argued against it at general elections and on broad trade principles at all times, but we are approaching uncommonly near the Capital Levy as it is in these Death Duties, and when I remember what former financiers and Chancellors of the Exchequer have said, I feel the more uneasy on the subject. It was only the other day that I was reading a speech of Lord Oxford and Asquith highly commending Sir William Harcourt's tenure of office as Chancellor of the Exchequer, but what did he do? He was the first introducer of Death Duties, in 1894, and, if my memory serves me accurately, he then said that 10 per cent. was the full amount that ought to be charged on a deceased's estate in respect of Death Duties. What is the position now? Why, the maximum on the highest estates has reached 40 per cent., and how much further will it go? I want to know where the line is to be drawn. We do not know whether there are not members of the Labour party who would say that estates ought to be charged in Death Duties 100 per cent., but, really, by doing that they would be doing an infinity of harm to the general confidence, stability, and trade of the country, and to the continuity of the trade of the country. I am quite ready to admit that Death Duties have a certain moral use in protecting the idly disposed from the temptation of not working, which is unfortunately only too prevalent in every class of the community, but, as I said, there must be a line drawn somewhere. These Death Duties are heavy enough, and I deprecate the Chancellor's proposal to set any kind of precedent by further increasing them.
I am not speaking merely my own feeling in this matter. I know that it is widely felt in the party to which I belong and, I believe, elsewhere, and I would earnestly appeal to the Chancellor of the Exchequer and the Prime Minister to consider the views of so many of their supporters. Economically, an increase of Death Duties is a direct waste of capital. Capital is accumulated savings. It is self-denial on somebody's part.

Mr. DALTON: On a point of Order. We are listening to an interesting discus-
sion on the Death Duties, and I am desirous to be assured that those of us who are listening with great interest will be allowed to follow the right hon. Member along the lines he is now traversing.

The CHAIRMAN: I have been in some doubt whether the right hon. Gentleman could go on much longer without relating his argument to the remission of the Super-tax. It is perfectly in order to adduce an argument to show that the remission of Super-tax does not Justify the revision of the Death Duties, but I do not think it should become an argument on the Death Duties per se. I think it must be related to the balance which the Chancellor of the Exchequer has sought to establish between the two.

Sir E. CECIL: I quite recognise that, and in raising this discussion I ought to have said that I have an Amendment down to omit Clause 19, which is the Death Duties Clause, but I should not move it if I might make my point now. Perhaps that meets the hon. Member's point of Order. I was saying that capital is self-denial on somebody's part, and surely it is in the interests of the State not to dissipate it, but to encourage thrift in this respect, just as in the field of pensions or any other. But I will not pursue the question of Death Duties further. I would like to take one or two other points which I think have been taken by the Chancellor of the Exchequer in justification of his proposals. One of them is that he says that the remission of Super-tax will stimulate production. Whether that be so or not, the Death Duties under his proposals will still operate simultaneously, and at an increased rate, and, undoubtedly, Death Duties retard production. They are a severe burden to anyone engaged in trade, and, therefore, I do not see that the mere counterbalancing of Super-tax and Death Duties will do any good whatever in the way of stimulating trade as a whole. I do not know whether the Chancellor of the Exchequer thinks his proposals will attract certain Super-tax payers who, perhaps, have their eye on their own circumstances more particularly, and that they will give him their votes in consequence of these proposals. If so, surely that is a policy of pure opportunism. I have been told, personally, by one or two
who say they are favourably affected by the new proposals, that they consider them bad finance, and they do not support them, in spite of the fact that they would give them some personal advantage.
The Chancellor of the Exchequer says you can insure against them. Now what are the facts about this? The real truth is that in very numerous cases you cannot insure. I happen to have some knowledge of a large insurance company, and I have here a. number of figures, which I shall be pleased to show the right hon. Gentleman or any other Member, showing exactly how far you can insure against these proposals. You are assuming that the life to be insured is insurable, and not impaired, and is not subject to any extra premium on account of occupation. You have further to be sure that the annual saving by this reduction of Super-tax is constant throughout the life of the insured person. If a future Chancellor of the Exchequer imposes fresh taxation, and lessens his means of saving, the policy of insurance must be dropped or surrendered. You must also have regard to the character of the estate. If it is that of a professional man, the estate may be five times the value of the gross annual income, and easier to insure. If on the other hand, it is an agricultural estate—and Amendments are to be moved on behalf of agriculture—it may be 20 times the value of the gross annual income, and much harder to insure. The actuary's figures—assuming the case of a normal life, with none of these disabilities—as to the actual age up to which you can insure against these proposals is from 53 to 55, and no longer. Anyone over that age cannot possibly insure against these proposals, and it is futile to suggest that he can.
Therefore I would, in all friendliness, appeal to the Prime Minister and the Chancellor of the Exchequer to cancel both the proposals in Clauses 13 and 19 as regards the Super-tax and Death Duties for three reasons at least—because taken together they are, first, unsound finance; secondly, they do not really tend to increase production, but at once spasmodically stimulate and retard it; and, thirdly, insurance against the loss is often quite impossible. If they cannot see their way to withdraw their present
proposals, I can only earnestly trust their mistake will be rectified in the next Budget.

Sir PATRICK HASTINGS: I think every member of the Committee will probably agree that it is most unfortunate if many Members of the Front Bench on either side intervene in the Debate. I can assure hon. Members I will only delay the Committee for a very few minutes. I think I may say I am not very frequently an offender in this respect, and I must say with regard to this Budget I do not think I have said anything at all. But I am going to intervene to urge the Chancellor of the Exchequer—not that I feel I can speak with any great confidence as to the result, but I am going to urge him to think seriously once more before he decides inflexibly to enforce this Clause in the Finance Bill, not for any reason at all, I think, that has been given to-night, or indeed in the previous discussion. I am not concerned here with any—if I may use the expression—purely ad hoc argument about it being a rich man's Budget, nor, indeed, any purely economic argument such as that we have had from the right hon. Gentleman who spoke last, but from an entirely different point of view. I am sorry that the Chancellor of the Exchequer is not here at the moment, but if the Financial Secretary replies, he will perhaps think it worth while just considering the matter from this point of view. In my experience, and I believe the experience of practically every Member of the House, hardly anybody in the country, except perhaps a few manufacturers, are interested in this Budget. These questions of the silk duties that we have discussed, largely with the assistance of the hon. Member who sits in the corner behind me, until the late hours of the night, and, indeed, until the small flours of the morning, I do not believe interest the people of this country in the slightest degree. But there is one matter which does interest them, and, I believe, interests every one of us who is seriously concerned, as I know my right hon. Friend the Prime Minister is seriously concerned, and probably more so by reason of his responsibilities than any of us, in the feeling which is growing up in the country to-day.
We cannot open a newspaper to-day—and here I can assure the Committee I
am speaking with all moderation—without finding half the discussion taking place upon what those representatives of the Press are pleased to call "the activities of the Reds." Most people in this country know perfectly well that we are not unduly affected by such considerations as those, and most of us—and I am sure the Prime Minister as much as anybody—know that in this country there is no more danger from those people, so called "the Reds," than there has been probably ever since this country's history began. But things are not tending in the direction of which he spoke when he gave vent to that prayer which we heard him give from his seat in the House, and I am going to give, if he will allow me, one example of what I mean, which happened two days ago in my own constituency, which is largely mining, every one of the mines in one part having closed within a very recent period. The chairman of one of the local councils, himself a working miner, came down to London to see the Unemployment Grants Committee with reference to some work he desired to have done. I saw him, and, after a considerable pause of silence, he began to talk about this Budget and this Clause. He asked me to tell him what people in London could know of the affairs in the North of England, in the state in which we are living now, when everybody is supposed to be looking to the Budget for some guidance as to what is the policy of this Government towards these great questions, and they really found that the one relief which was being given was towards Super-tax payers.
I can assure the right hon. Gentleman the Chancellor of the Exchequer, now that he has returned to his place, that I am not speaking in the slightest degree with a desire to raise the cry about a rich man's Budget or any other form of stock-phrase. I can assure him that this reduction in the Super-tax is raising a storm of genuine discontent throughout the North of England. People are absolutely roused to a state of fury. It is all very well coming forward and stating that there is a reason for it. The right hon. Gentleman has been asked by innumerable speakers to-night to tell the Committee in what respect the reduction in the Income Tax was going to benefit industry. Speaker after speaker has called attention to the fact that there is no lack of capital. It is not from lack of capital that we are
suffering; the case for the Super-tax reduction is infinitely worse. The right hon. Gentleman may take it from me that a great many members in this part of the House are as much concerned to see that their constituencies remain as loyal to the constitution as hon. Members are, or suggest they are, upon the other side of the House. The last thing that anybody in my constituency desires is to be one of those so-called Beds about which we hear so much. But what answer can we give to our constituents? The Chancellor of the Exchequer has given us his Budget. We are bound to tell them, as I myself have had to tell my constituents, that when we come to consider the Super-tax proposals, that the Chancellor of the Exchequer has said that, whereas he is in the position to get some £10,000,000 from the Death Duties he proposes to use that in order to give some reduction of the Super-tax.
I can assure him that more harm has been done by that to those members of the public who are supporters of his—apparently ardent supporters—more harm has been done by the reduction of the Super-tax than possibly some of his advisers have allowed him to know. It is one thing which is causing immeasurable discontent. I can assure the right hon. Gentleman, as he knows—just as does the Prime Minister—that as every speaker behind me has said to-night, with all the terrible misery that is going on throughout the country—it does not require a speech such as that of my hon. Friend the Member for Bow and Bromley (Mr. Lansbury), who has told us about Ascot and so on, which are really infinitesimal compared with the major questions which he has to consider—it does not require instances of that sort to fortify our position; but when we have the Chancellor of the Exchequer using the £10,000,000 as he is doing in times like the present to give this Super-tax reduction, I can assure him that he is taking upon himself a responsibility which does to my mind weigh, or which ought to weigh, more heavily upon him, and which will do more harm than all the so-called Red propaganda to-day. There is no argument at this moment which is causing so much discontent than this reduction of the Super-tax. Even at this late moment, I do urge upon the Chancellor of the Exchequer to think for
a long time before he insists upon this measure, and unless he is able here and now to give some definite reason as to how the reduction in the Super-tax is going to benefit the unemployed and those who are destitute to-day in this country.

Mr. S. ROBERTS: I wish, if I may, to to add to the request made by my right hon. Friend the Member for Aston (Sir Evelyn Cecil) to the Chancellor of the Exchequer to strike out this Clause of the Finance Bill, and also Clause 19. I want to accept, and to make my own, the arguments of my right hon. Friend the Member for Aston. I appeal to the Chancellor of the Exchequer on these grounds, and also on the other points of view which I wish to put before him to leave this matter alone. The speech of the right hon. and learned Gentleman who has just sat down, I think, I might almost also plead in aid why the Chancellor should leave this matter alone.
9.0 P.M.
I dislike having to get up and to add my views to the great multitude of ingrates; because one does feel that people who as a whole believe in this Budget and accept such benefits as comes from it ought to be very chary indeed in their criticism of those portions which they do not like. I say definitely and at once that whatever the decision of the Chancellor of the Exchequer on these Clauses may be, I for one will not for one moment vote against it, and I simply make this appeal and desire to put one or two arguments before him as to why I think he is wrong. I am not going to say that the reduction in the Super-tax is bad. I believe it will do something to stimulate industry. I believe the Super-tax payer is entitled to equity and justice the same as any other taxpayer, but in these matters the question is one of balance. In this remission of the taxation the Super-tax payer with the increase of the Death Duties, the question I would, if I might, put to the Chancellor of the Exchequer, and that I trust he will be good enough to answer, is whether he will consider this question from the point of view of the encouragement to thrift—

Mr. CHURCHILL: What?

Mr. ROBERTS: —whether the right hon. Gentleman will consider the encouragement to thrift; whether he considers
that thrift is a virtue which should De encouraged? The Super-tax payer is to be allowed to retain in his pocket—I object very much to those words "doles to the Super-tax payer," as if people are not entitled to the money which belongs to them! It is a question of what is taken away. What belongs to me, I believe, is my own. What is taken away by means of taxation is a necessary evil with which one has to put up. At the same time, when one talks about the relief of taxation it seems to me rather hard on the people who, as the hon. Member for Norwich (Mr. Young) has said, have borne the burden and heat of the day. I know that it is an entirely old-fashioned and out-of-date idea that anybody has a right to his own property—according to hon. Gentlemen opposite. I do not, however, want to deal with that point at all. I want to make, so far as I can, a reasoned appeal to the Chancellor from the point of view of thrift.
Take a concrete instance, that of a man with £100,000, which brings him in an income of £5,000 yearly. I wish to base my argument upon that—upon the 5 per cent. basis. Under the Budget of the Chancellor, that man, in his Super-tax payment, will receive relief to the extent of £131, but his Death Duties will be increased to the extent of £6,000. I want the right hon. Gentleman to consider the frame of mind of that man when he considers his own finances and his working out how the Budget is likely to affect him. He will find that the Budget leaves in his pocket £131 more than it did last year, but he also finds that there will be £6,000 added to the Death Duties, which his children will have to pay. He may or may not be a thrifty man, but the great urge to thrift on the part of most of us is to leave our children as well off, or better, than we are ourselves. Very few people save for themselves. It may be right or it may be wrong to save for one's children, but, then, you love your children and, the great urge to thrift is to benefit them, as I have suggested. The man I say finds he is into pocket £131, and that there is the £6,000 on the other side. He cannot insure against this. Really to insure for the £6,000 he has got really to insure for £8,000, because of the increased burden put upon him. What is the natural thing for the
ordinary man who is not a man of very great stamina or moral courage to do? The average man would probably throw up the job and consider it was no use going on trying to be thrifty. The best thing he would say, was not to save for his children, because the Government were going to take it, but to say: "I will waste my substance in riotous living." I myself have known a good many people saying what they were going to do with this relief because of the extra burden of the Death Duties. People are not altruistic enough to save a lot of money for the Government, though we may get educated up to that pitch in time, and the immediate effect of the increases in the Death Duties will not be an encouragement to thrift, because people will -say, "What is the use of saving it, it is going to the Government." As an alternative they would find means, by various perfectly legal methods, of benefiting their children in their own life time at the ultimate expense of the Exchequer.
The benefit given to industry, the encouragement to investment and to savings, by the remission of the Super-tax is taken away, and more than taken away, by this great increase of the Death Duties. Only one class, as far as I can see, will really benefit, and that is people with large incomes and no capital. I do not want to appear to be unduly criticising the Government, but because this may lead to a certain amount of political trouble, I do ask them to reconsider this question of the relief of the Super-tax and this question of balances. What we are proposing would be a gain of £2,000,000 to the Exchequer this year. Let the Government accept that gain, and they will satisfy a very great deal of the best Conservative opinion in this country, the opinion of people who really consider the national interest rather than the temporary interest of what they are going to spend this year or next. Even at this late hour, if they will go back to the status quo and not make this change, I believe they will be doing a great benefit to themselves and to the country.

Mr. LLOYD GEORGE: I would like to enforce the appeal made by the hon. Member who has just sat down. This provision with regard to the Super-tax does not seem to me to be an essential
part of the fiscal scheme of the Chancellor of the Exchequer, and the proposal will not really interfere with the general scheme of his fabric. When the reduction of the Income Tax was discussed, I had no hesitation at all in speaking in favour of the Chancellor's proposals, and I voted for it. I put this in a totally different category. The Chancellor of the Exchequer ought to regard these taxes from the point of view of the very serious condition of industry. It is undoubtedly very alarming at the present moment. Anyone who took the trouble to read the railway traffic returns for last week would see that they were very alarming. In the case of one railway company, the returns from goods had gone down something like 30 per cent. compared with the previous year. That applies to most of the railway companies doing their business in the industrial districts. It does not apply to the same extent to the southern railways; but in the case of the great industrial railways the traffic is seriously down. We need not go to the import and export returns, which are all so very full of menacing details—very full—to see that our business seems to be paralysed and on the whole getting worse. I suggest to the Chancellor of the Exchequer that he ought to regard his fiscal scheme entirely from that point of view.
The Income Tax is much more of a tax on industry than is the Super-tax. As he knows very well, Income Tax is charged upon the profits of a business. That is not the profit that goes to the individual, but the profit made by the concern. In every good concern a considerable proportion of profit is held back to provide a reserve, for waste, and for all the things that are essential to a good going concern, and the tax is imposed upon that; therefore when a reduction is made in the Income Tax, the benefit goes in very many cases direct to industry. But that is not the case with the Super-tax. The Super-tax is not levied merely on realised income, but on the income which comes into the hands of the individual for his own personal expenditure. He may put that money back into industry, but on the other hand he may not. Some people undoubtedly do. I am not going to say that if the Chancellor of the Exchequer had no other object upon which he could
more appropriately and more usefully spend his £10,000,000, that it would not be fair to cut down the Super-tax. I think it would be. There is no doubt at ail that many of the men who receive huge, incomes do not spend the money upon themselves. [Interruption.] Well, they must be very clever men to be able to do it, and they do not; very often they put it back into investments and into the development of their business, and the proportion which they spend upon their own personal enjoyment and indulgence is very often not as high as one would imagine. If the Chancellor of the Exchequer had plenty of money for every purpose, there would have been a good deal to be said for the reduction in the Super-tax, because to a certain extent a high tax does discourage bold and ingenious minds from projecting new schemes for the purpose of developing the trade of the country and producing employment. I do not in the least underrate that point of view, and I am not making the criticism from the point of view of saying that these people are getting huge incomes and ought to pay. That is not my point of view.
What could the Chancellor of the Exchequer have done? The hon. Gentleman who has sat down has pointed out that he might have abstained from putting up the Death Duties. I am not entirely with him there. I have always thought that, on the whole, it was a fairer method of taxation to take the money out of the good luck of the man who inherits a great fortune than to take it out of the earnings of a man. But there are other ways in which he could do it. I am not going to enter into any details, but I can just indicate that there is the trouble he is in about his pensions scheme, and how he is going to get over this very bad period without charging industry with 4d. or 3d. That is, undoubtedly, a very serious problem, and I speak as an out-and-out supporter of the pensions scheme. I should have thought he might postpone his Super-tax reduction in order to finance that scheme during this bad time, thus saving an additional burden on industries which are in a very bad way. The Secretary of the Miners' Federation said the other day that since January, 1924, 500 pits had closed. I dare say some of those pits are small, but some of them are not, and, after all, 500 pits
are 500 pits, and that is a very serious thing in the history of any country. When I was passing up to the North the other day I could see shipyards with nothing in them, and there was a general sense of despair. I should have thought the Super-tax man, who is doing well, otherwise he would not have the Super-tax to pay, the man, for instance, who has £50,000 a year—

Mr. CHURCHILL: The right hon. Gentleman knows well that Income Tax is levied on the three years' average and Super-tax is levied on the previous year. Consequently, a mail may be making no income at the present moment, and yet be liable to very high taxation as a result of his trading two or three years ago.

Mr. LLOYD GEORGE: The Chancellor of the Exchequer could deal with cases of that kind—and there must be cases of that kind—where a man who is receiving no income is called upon to pay in respect of income he has already spent; but if he has been receiving £50,000 or £100,000 a year he ought to have a little to spare for the Super-tax, even for the third year. But if the Chancellor of the Exchequer were to meet exceptional cases of that kind, they would not take £10,000,000. A million would far more than cover those cases. Because there are a few hard cases of that sort the Chancellor of the Exchequer takes his pen and writes off £10,000,000 for people who are not in that plight at all. If there is an industry which is struggling hard to get along, can barely keep its gates open, and which is losing money—there are a good many of them in that state, and they are only going on in the hope that in a few months perhaps trade will improve, and they go on like that from year to year—these industries are to be taxed, and taxed upon their three years' average, although they may be making no profit at the present moment. If the Chancellor of the Exchequer wanted to help industry, he should see that these new burdens do not fall during the bad period.
In the year 1914 the Budget of that year did not materialise, because the War came and we put up the Super-tax and we raised £10,000,000 to relieve the burden of the rates throughout the country. That is the exact figure which the Chancellor of
the Exchequer proposes to write off. He knows that there are very many collieries and works which have been oppressed by the heavy burden of rates, due largely to unemployment in many districts, and the worse the trade is in a district the heavier is this burden. If the Chancellor of the Exchequer could do what we were unable to do in 1919, 1920 and 1921 because our Budget was very heavy, that is deal with the necessitous areas, it would be a good thing. I am just giving reasons now why he should not interfere with this tax this year. It is not because I am opposed to a reduction in the amount, but because I am opposed to a reduction at the present moment while the Chancellor of the Exchequer has other calls upon him. When the right hon. Gentleman proposes to put fresh burdens upon those who have to pay Death Duties, when he has also got a proposal which is an integral part of the Budget to put fresh taxation on industries in connection with a pensions scheme, and when he finds in other directions the burden is so heavy, I ask him to respond to an appeal from all sides of the House not to interfere with the Super-tax.

Mr. CHURCHILL: This proposition for reducing the Super-tax can only be considered in conjunction with the other proposal which has been put forward. So far as I am concerned, if one were rejected the other would fall. [HON. MEMBERS: "Why?"] Because I would not for one moment think of adding to the burden of the Death Duties without giving some relief to the Super-tax payer. I am aware that that is a view which does not tally with the opinion expressed by Members of the Labour party, but my propositon stands as a whole. I know that there is a strong disposition in some quarters to drop this proposal to increase the Death Duties and to reduce the Super-tax, and that is an opinion which commands the support of a considerable number of thoughtful men. Certainly we have to remember the use that can be made of a proposal of this kind.

Mr. J. BECKETT: You are proving that there is a class war, but you are like a voice crying in the wilderness.

Mr. CHURCHILL: It is all very well to interject observations of that kind,
but, surely, if you are carrying on a class war it is better to stand up to defend it. At any rate, the hon. and learned Gentleman the Member for Wallsend (Sir P. Hastings) made a speech in which he referred to the terrible effect produced in the minds of the people of the North by the remission of the Super-tax, and he spoke of the way in which the Communists and the Reds had alarmed some members of the Government. I am aware that a proposal like this lends itself to misrepresentation if it is not fairly stated, or if the other part of the proposal is not fairly stated. I foresaw that at the beginning, but we thought we were strong enough to act according to what we believed to be the merits of the case, and I was not deterred by the obvious consideration that the reduction of the Super-tax would be most dishonestly denounced as being a mere relief to the most wealthy people in the world or in the country, and that all kinds of capital would be made out of that, while no mention would be made of the fact that a further burden is being transferred to them through the agency of the Death Duties.
I think, in the time at our disposal, we shall succeed in establishing the soundness of the grounds on which we have acted, and the results which will be effected in the general life of the country by three or four years of steady policy from one broad point of view will be sensibly appreciated by all classes in the State. I do not think we are bound to present our case in isolation; in so far as you connect these two propositions, they are a transference of burdens. I should have thought the proposition of linking these two proposals, one the reduction of the Super-tax and the other the increase of the Death Duties, would have been one in consonance with some of the ideas we have heard from some of the Labour benches to the effect that capital rather than income should be a subject for taxation. I am surprised to find that it should be denounced in no unmeasured terms by the hon. and learned Gentleman the Member for Wallsend, who held up his hands in holy horror and spoke about transferring £10,000,000 of taxation from income to capital, from the live hand to the dead—he held that up as a frightful act of class warfare, and I think this shows that even some of our opponents are getting a little away from
their own first principles in their desire to make every point a matter of prejudice against the Government which they are attacking. I would never attempt for a moment to justify this transference as part of a general principle, but I think there are very good reasons for it at the moment. I agree with much that is said on this side of the House against pushing the Death Duties further than they have already been pushed on account of the resulting diminution of the capital fund. Therefore, I make no general case for it, although I can see that hon. Gentlemen opposite are not entitled to attack such a transference on their theories. I am not basing myself on that; I am basing myself in this matter on this particular proposal at this particular time and within these limits and that is all.
I am in a most disinterested position as Chancellor of the Exchequer because if I took the advice tendered to me by my hon. Friends and responded to the appeal from the Liberal and Labour Benches, and wiped out the Death Duties and the Super-tax relief in one stroke from my Budget—and I could easily do it even now—as far as the Exchequer was concerned we should be £2,000,000 better off this year and neither better nor worse off in any subsequent year. Therefore, from the point of view of the Chancellor of the Exchequer this proposal is a most disinterested one. It faces trouble, it faces misrepresentation, certain misrepresentation, gross misrepresentation, dishonest misrepresentation. It also faces honest misunderstanding in many quarters. It produces features in what is called the rich's man's Budget which many rich men will view with misgiving. Generally it appears a most quixotic effort on my part.
I will tell the House quite frankly what actuated me. It was the consideration of the merits, having regard to our present situation. Like everyone else I am deeply concerned at the trade prospect and aspect and at the unemployment which lingers and is even increased in one quarter or another—I decline utterly to judge of the effect of measures by the results in a short period. I think it silly to say that since the Budget was announced 100,000 more unemployed have been on the register, or that since the Budget was announced trade has fallen off, or that the imports of raw material
have diminished, as we were told earlier in the evening. To say that those things can be traced to a declaration only six weeks old is absurd. Therefore, I decline to be judged by what has happened in a particular month or fortnight. Broadly speaking, I have been led to believe that it is an increase of enterprise and effort that is required on the part, not merely of the wage-earning classes—their effort is very great—but increased enterprise and effort on the part of the capital-owning classes of this country. You have to deal with human nature as you find it. There are many persons in this country in comfortable circumstances managing businesses, with a great deal of power to influence an increase of production, who are deterred by the present heavy taxation from running all the risks and making all the efforts that are required from them. They say, "Our business is very sound. It is running on a very small basis, and we have shut down as much as possible. We are taking no risks; we are not going to embark on any speculative enterprises where we will have to go on putting in capital for three or four years. We are not going to take any of those steps at the present time because if we are wrong we will lose and reduce ourselves to a very crippled condition, and if we succeed an enormous proportion is taken away." Very nearly half is often taken away by the present high rate of taxation. It is the need for that serious effort that has led me to make a proposal exposed to so much hostile criticism from such diverse quarters in our political spheres.
I have found among the official advisers, with whom I have intercourse, an opinion that nothing would more stimulate the saving and enterprise of the country than a diminution in the Super-tax, although I was also assured that probably no one would ever dare to attempt that step. I myself should never have thought it justifiable to take it, unless it were linked, as it is, with this other proposition of the increasing of the Death Duties. It constituted a factor which, added to the reduction in the standard rate and the discrimination between earned and unearned income, enabled me to make a diminution of approximately a shilling in the £ with resources which could not possibly otherwise have achieved that purpose. That was the
scheme, and I think that it should be very carefully weighed and studied by the House. We are not so poor, we are not so feeble at the present time in the control of the government of this country as to be afraid to make a proposition which we believe to be sound because it can be misrepresented and because it can be made the subject of prejudiced attack.
I have acted in this matter not at all from a desire of reinforcing the funds at the disposal of the Exchequer, but of shifting the burdens on a class of very heavily taxed taxpayers from one part of that body where it is inconveniently borne to a part where it is more conveniently borne. Broadly speaking, although you might cite individual cases against it, throughout the whole range this is a transfer of taxation from one part to another of the same taxpaying class. It is a principle which no party has less right to oppose than those on the benches opposite. It is quite true that some hon. Members on this side of the House are of opinion that it will be far better to keep the Death Duties at their present level and leave the Super-tax unrelieved. That is a very general and very wide view. As a permanent policy I would subscribe to it, but one must take into consideration the peculiar circumstances of the moment, the need of producing a psychological effect within the small limits open to us, of making people feel that they can and ought to run the greater risk and hazard in starting enterprises, and that they will in return receive a greater measure of reward. Having regard to that, we think, after careful consideration, that at the present time, without any interest in regard to the revenue of the State, it was a wise and prudent transfer to make and one which will conduce to the economic advantage and activity of the country, which will lead to greater production of new wealth and will not prejudice the existing accumulations of old wealth, which will also tend to some extent to give a needed stimulus to enterprise, and which in no way alters the social balance to the detriment of the wage-earners as compared with the capitalists of the country. That is the proposition which we put on its merits before the Committee, and we hope and trust that we will 'be judged in this matter by the
broad effects, which will be operative over a period of time during which it seems probable that some of us, at any rate, will continue to be responsible.

Mr. DALTON: I do not know whether the Chancellor of the Exchequer, led on by the encouraging cheers of a certain section of his supporters, will have the hardihood to take the Whips off when this Amendment of ours goes to a Division. He shakes his head. In other words, those of us on this side of the Committee who have attacked this proposal on the merits, know that, if only the automatic majority were not to be put into operation, we should, on a free vote of the House, have a majority in the Division Lobbies. The Chancellor of the Exchequer, I think, only made a verbal slip when he stated that speakers on this side had appealed to him to withhold both the reduction of the Super-tax and also the increase of the Death Duties. No speaker on this side has said that at all. We willingly accept, I think—at any rate, speaking for myself, I willingly accept—Clause 29, to which we shall come later, as an instalment of the larger policy of increasing the Death Duties to an even greater extent in the future, and, in the words used by the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George), we believe it would be better to tax a man on his good luck in having come into an inheritance which he had done nothing to earn or deserve. No opposition is likely to come to the Chancellor of the Exchequer, except from his own supporters, on the question of the increase of the Death Duties.
But, reading this reduction of the Super-tax with the reduction of the standard rate of Income Tax, I think we are in the presence of an even greater scandal from the political point of view than the Silk Duties and other subjects upon which much time has been spent during the past week. My own opinion is that this Clause which we are now discussing is the most flagrant Clause in the whole Budget, and that against which the greatest volume of protest should be directed. An earlier speaker from the Liberal Benches, the right hon. Gentleman the Member for Norwich (Mr. Hilton Young), spoke about the equities of the case. He spoke about the equity of giving the Super-tax payer, not only the advantages which always accrue in very
large measure to Super-tax payers from reductions in the standard rate of Income Tax, but of giving him also some special reduction in the rates of Super-tax. Equity is rather a disabling thing, but, if we are to talk about equity at all, then the smaller inequity is drowned in the larger inequity, and the chief inequity of which I am conscious in approaching this problem is the inequity of these enormous incomes subject to Super-tax which are being received by persons who in a great many cases are not in business at all—people living idly on inherited wealth, people living on appreciation of land values and other socially created values, and even interested in business operations in Shanghai for the benefit of the British Empire.
The business man is always to the fore on these occasions when demanding favours. He is a little like the Plymouth Brothers, who think that they, praying in their own watch tower, are the only people in Heaven. Rather similarly, the business man seems to think he is the only person who pays taxation or receives a large income for the services he renders. The statement has been made from these benches, and I am prepared to make it again and to prove it, that this Clause gives enormous doles to the rich. The word "dole" has been objected to on this occasion from the other side of the Committee, but, when I say that this Clause gives enormous doles to the rich, what I mean is that the rich receive large additions of net spendable income as a result, without rendering any additional service. Is the right hon. Gentleman going to get up and tell the Committee that the millionaire who, under the scheme of tax reduction outlined on page 14 of his Financial Statement, gets an additional income of £40 a week renders any additional service as a result of that?
He cannot even guarantee that this money is going to be put back into industry, even if that were a desirable thing to do with it, which I am not for the moment discussing. I want simply to face realities, and not to endeavour to paint lurid pictures, which it would be easy enough to do in view of some of the disclosures that have recently been made as to how wealthy people really do spend their money. We are dealing with actual facts. It is not simply the business man
who receives these incomes and spends them on expansion of business. We know of all the anonymous turpitudes of General "X" and Mr. "A" and all the rest of them, and it is worth noticing that these are among the 87,000 happy people who are going to benefit by the Clause which is now before the Committee. I have no doubt that it was the knowledge of these facts, and of the benefits about to be conferred upon undeserving persons, which led a large number of hon. Members on the other side to applaud the proposal not to give these doles against which we on these benches have risen to protest.
I have no wish to ladle out, as some hon. Members have done earlier in the Debate, large quantities of statistical information, but there is one fact which I think it is worth while to reassert in connection with this Clause. The Income Tax has already been reduced by the vote on the previous Clause, and that makes it all the more necessary that we should protest against these further reductions. Whereas before the War the amount received from Income Tax and Super-tax taken together used to cover the whole of the debt charges twice over, and leave half the total yield for the expenditure of the country on defence and social services, after these reductions the net effect on Income Tax and Super-tax combined is that next year the Chancellor will get only £325,000,000 from the Income Tax and Super-tax to meet a total debt charge of £355,000,000. Before this, it was possible to say that the Chancellor of the Exchequer was operating a penny-in-the-slot machine for the benefit of the wealthier sections of the community, as a result of which they put in their Income Tax and Super-tax and pulled out their War Loan interest. The change which he has made this year will have the result that now other people are going to contribute their pence to this machine, while the benefit is still going to accrue to those who drew it before.
I think that on a broad view of the distribution of wealth, the distribution of opportunity, and the general justice of the case, it would be absolutely impossible to defend this Clause in any disinterested and impartial assembly. As has already been proved, and as I again repeat, there is a strong body of opinion arising on
every side against giving these exceedingly inequitable and inexpedient reductions. The Chancellor of the Exchequer said he felt justified in making this reduction now, that he was quite willing to face misrepresentation now, believing that this Parliament had a long period to run. His hope is that before the next General Election, other incidents will have intervened to make people forget—at any rate those who are not Super-tax payers—the extraordinary departure from the principles of sound finance which is embodied in this Clause. He is banking upon this great issue being obscured by others which will arise between now and the next appeal to the country. That, however, should not deflect us in the attitude we are taking, and I repeat that I defy the Chancellor of the Exchequer to allow this Clause to go to a division with the Tory Whips off.

Lieut.-Colonel JAMES: I should like to refer to the pontifical utterances we have just heard from the last speaker. He assures us that you will improve trade by piling on taxes in every quarter. Really, an argument of that kind leaves me perfectly cold. There are certain points with which I disagree profoundly with the Chancellor of the Exchequer. He spoke a few minutes ago about transferring the burden from the live man to the dead.

Mr. CHURCHILL: From the live hand to the dead hand.

Lieut.-Colonel JAMES: If you go up and down the country and see estates which the hand of death has visited in the last five or seven years, you will see them falling sadly into disrepair through want of capital and through the heavy imposition of the Death Duties. You will also see it in industry. You will see the one-man company, for example, the one man who is supposed to have all his money locked up in the form of scrip and stock and shares in his safe. You would think his death would not affect the situation very much, but it does. To meet these staggering Death Duties the estate has to be sold and the firm is less well conducted than it was. For these reasons I fundamentally disagree with the general proposals put forward by the Chancellor. I shall certainly not support the hon. Member in his thesis that a Capital Levy is excellent. I spend the
whole of my time as a politician outside this House proving from A to Z that the Capital Levy—

The CHAIRMAN: rose—

Lieut.-Colonel JAMES: I apologise.

Mr. KIRKWOOD: You are not going to give us any of that sob stuff.

Lieut.-Colonel JAMES: Is it in order to suggest that I am giving "sob-stuff"?

The CHAIRMAN: I have some difficulty in understanding the hon. Member's interruption and in knowing whether it is in order or not.

Lieut.-Colonel JAMES: I hope between now and the Report stage the Chancellor will use some means of bringing the two conflicting principles more or less together, and assuaging the genuine alarm felt by agriculturists in particular, and by one-man companies in general.

Mr. SCRYMGEOUR: I am not surprised that the Chancellor of the Exchequer should exhibit his championship of those who occupy such exceptional opportunities for the enjoyment of a society life. It is just what we might have expected. The Debate has shown that while these people have even improved their position, the general body of toilers, upon whom we lay so much of our taxation indirectly, occupy a position of 10 per cent. of a disadvantage in the matter of their ordinary weekly wages as compared with their pay before the War. If the argument is correct that only in this way are we going to give the requisite fillip to industry we should have expected a far greater instalment of reduction in order to facilitate the declared object. If we really have gone, as has been said by some hon. Members opposite, beyond Sir William Harcourt's figure of 10 per cent with regard to other taxation, which we are not entitled to dwell upon, up to the point of 40 per cent., it goes to show that practically in all parts of the House that line of reasoning and even that extent of additional taxation was considered to be justifiable and thoroughly warranted. The question that arises to my mind is as to what the Chancellor said. Are these two classifications, or rather two sections of the same classification, or are they not, able from their circumstances to meet the taxation which has already been imposed instead of making this reduction.
When we have the fact before us we find, as the ex-Prime Minister has said, that these people would not be paying this Super-tax if they did not have the requisite income. As has been shown, many of these folks are not in business at all. They are, broadly, the representatives of a demoralised society, demoralised because apparently they have too much time on their hands and a disinclination to work, which is one of the points made by the Chancellor of the Exchequer concerning unemployed people. The reason why they have a disinclination to work is that they do not require the work. The money is forthcoming without their making any effort at all. In fact, we had one right hon. Gentleman, during the War, explaining that he was really becoming rich through the shipping industry, and it was such a remarkable state of affairs that he really could not tell how it came about. I know the shipping industry has gone somewhat off since then, but it is an illustration of the anomalous situation when you think of the body of people who have such a tremendous struggle to maintain existence and whose conditions were so correctly described by the same Chancellor of the Exchequer when he was expounding a certain scheme which had the ostensible object of providing 10s. a week in order to meet in some degree their stress of circumstances. The ex-Attorney-General made what I feel was a specially important point. I know the Chancellor of the Exchequer does not care about giving very much importance to it, but I reckon it is of the utmost importance. He urged the point that there is a section of the community who are giving some concern to the Government, not only in this country, but elsewhere, and those people are, naturally, fastened upon, as the generality of us say on these benches, to show how harmful are the representatives of these class interests which unquestionably exist and are only being intensified by this Clause. That situation is exasperating to the men who are taking the course which involves absolute disaster to the Labour movement. I am convinced of that. At the same time, I agree with the ex-Attorney-General that some better explanation must be given than this juggling on the part of the Chancellor of the Exchequer, of taking a little off here and putting a little on there concerning
a class of taxpayer whom he dare not say are not able to pay what they are now asked to pay; but who could pay much more than they are asked to pay. I say to hon. and right hon. Gentlemen opposite, if they cannot find a better way of meeting the unrest that arises from this sort of thing than saying that you will put down by force if necessary anything which endeavours to express itself unconstitutionally, you are going to be put into a very awkward predicament, and those who on this side of the House stand by the constitutional position will be handicapped, when we find that this sort of thing is going through the House in support of the very people who aggravate these feelings in the country.
Recently there was a scene in St. James Park, which is probably familiar to hon. Members opposite, when a queue was lined up of a very different character from the queues that we see outside the Employment Exchanges. I refer to the queue of carriages lined up in St. James' Park, where the rich people were flaunting their wealth with utter disregard for any question of economy. You would be insulting those people if you talked to them about thrift. One hon. Member opposite counselled the Chancellor of the Exchequer to think about thrift. It is very annoying and exasperating when we hear from the other side talk of the necessity for thrift, when this comparatively small number of people, with their millions of money, are able to flaunt their wealth, and are able to go about in society, not only in our own country, but in every part of the world, and even in the districts where there are people on what is commonly called the dole, and who are frequently insulted by the suggestion that they do not want work.
10.0 P.M.
If these rich people appreciated their manifest blessings as far as this world's affairs are concerned, and if they realised their duty, instead of coming forward occasionally with a contribution to the National Exchequer, they would say, "In face of what we see at the Employment Exchanges, and of the need to help the nation, we are determined to give all that we possibly can in order to ameliorate the circumstances that beset these poor people." Only the other day one read in the newspapers of a case in which a poor woman in the East End of London
suffocated her children. An appeal was made from this side of the House to the Home Secretary, and, to his credit, he responded with the practical result that he reduced the sentence so far that it meant the woman's immediate release. That mother was in the appalling condition that she thought it better to take the life of her own children.

The SECRETARY of STATE for the HOME DEPARTMENT (Sir William Joynson-Hicks): The hon. Member has mentioned a particular case. It is only fair to say that the appeal came from both sides of the House.

Mr. SCRYMGEOUR: That does not alter my argument. I appreciate the right hon. Gentleman's point. I did not know that an appeal had been made from the other side. I did not make the reference for the purpose of saying that the appeal came from this side. My object was to deal with the circumstances. There is an appalling amount of desperation in the country. I have set my face in several elections against anything that is going to involve physical action to deal with these matters. I am now constitutionally presenting to the Chancellor of the Exchequer a case drawn from past and present experience of the struggles of those whom he formerly represented. He knows what it means in the great industrial constituency of Dundee, in regard to which my hon. Friend (Mr. Johnston) has presented a very striking set of circumstances. The two representatives of the constituency which the Chancellor of the Exchequer formerly represented are here to-night protesting most earnestly against his proposal to relieve those who are able to relieve themselves.

Mr. TREVELYAN THOMSON: The Chancellor of the Exchequer, in justifying the reduction of Super-tax, said that it was the Government's special effort in order to stimulate industry and enterprise. He said he hoped to bring in new capital in order to give us more work. My experience of certain districts in the north, where unemployment is rife, is not that there is lack of capital, not that there is any new capital required, but that the capital there is lying idle and cannot be used. I cannot see how a reduction in Super-tax is going to bring orders to the shipyards, where their
capital is doing nothing, or to the blast furnaces, the rolling mills, or the steel works, where they have more capital invested than they can possibly use. Therefore, I fail to see how the reduction of the Super-tax can bring about the stimulation of industry which we all desire to see. If the relief is to stimulate industry, it should be granted to those who are in industry. A large proportion of the Super-tax payers who have no part in industry, who belong to the rentier class, who have retired and are taking no further part in business enterprise, will get the same relief as those who are still engaged in enterprise. The difficulty to-day is not the lack of capital but the lack of work for our shipyards which are lying idle.
If the right hon. Gentleman had been able to use the money which is being granted to the Super-tax payer in the form of grants in aid of rates which are crippling industry and which are a first charge upon any enterprise, the relief would have been of much greater benefit. The rates have gone up tenfold in recent years, and our shipyards are unable to compete with shipyards abroad, because before they can even lay down a keel they have to pay rates tenfold that of their competitors. Therefore, I suggest to the right hon. Gentleman as a more effective way of promoting industry to relieve the high rates that are crippling industry throughout the country which would have given an immediate relief far more effective than any relief to the Super-tax payers or even to the Income Tax payers. The view is held in industrial areas that, when you have a certain amount of money to give away, and a certain amount of relief to dispose of, to single out this particular class who are well above the poverty line and leave the workers still to pay their 4d. a lb. on tea and their ¾d. on sugar, and to pay the same prices for beer and tobacco, while the man with £2,000. is to get relief, is causing unrest and dissatisfaction in these dark spots where unemployment has been rife for so many years. These people cannot understand why the man with £7,000 a year should have relief granted to the extent of £347 16s. 3d., and why the man with £15,000 a year should have £852 16s. 3d. given in the way of relief, to which these poorer people have to contribute. It is a gratuitous insult to the rest of the tax-
payers to single this particular section out for relief, to give them a benefit for which they never asked and which they do not deserve, instead of giving it to their more unfortunate fellow taxpayer.
The wages bill has decreased by £500,000,000 during the last two years. At the same time the Income Tax assessment has gone up, so that the poor are getting poorer and the rich are getting richer, and this is the particular time chosen to give relief to the Super-tax payer rather than to the indirect taxpayer. The penny in the pound Income Tax last year produced £5,000,000, and this year will produce £5,500,000. This shows that there is no lack of money, so far as the Income Tax or Super-tax payer is concerned. I appeal to the Chancellor of the Exchequer to consider further whether he cannot give some real relief to enterprise, because there is no good in saying that you are going to give it on profits made when there are no profits, and when there is no work to make profits out of. You want to give relief which will enable work to be undertaken and profits made. I submit that things are so bad that something is needed to relieve these distressed areas and to give some hope that the wheels of industry may be set going. The mere relief of Super-tax payers is no advantage to the workers in districts where there are no orders, and consequently no profits.

Sir J. MARRIOTT: The speeches to which the Committee have just listened seem to me precisely to illustrate the point which at an earlier period to-day I was endeavouring to make. Hon. Gentlemen opposite find it impossible to discuss this matter except from the point of view of the individual taxpayers. They are incapable of regarding the economic situation as a whole. We on this side who are favouring the reduction of Super-tax are not favouring it in the interests of the individual taxpayer, but because, rightly or wrongly, we honestly believe that it will give a stimulus to industry as a whole. Of course, it is possible that we may be mistaken. [HON. MEMBERS: "Never!"] It is not very likely, I admit, but still it is just possible that even those who have given some thought to this matter may be mistaken on a point of such importance. But I frankly
confess in regard to this Clause that I find myself in a position of very considerable embarrassment.
I strongly favour a reduction of the Super-tax which this Clause is intended to carry out for reasons which I will not repeat, because they are practically reasons which I gave in relation to the previous Clause. On those grounds I believe it to be of very considerable importance that we should in the interests of industry reduce both the Income Tax and the Super-tax, but I cannot feel the same enthusiasm for the reduction of the Super-tax if that reduction is made dependent, as it was made dependent in the original speech of the Chancellor of the Exchequer, upon the increase of Death Duties. If I had to choose between the retention of the Super-tax at its present level and the retention of the Death Duties at their present level, I should favour keeping the Super-tax where it is. I suppose that I should not be in order if I were to deal with the Death Duties in relation to the present discussion, but I think that I am entitled to remind the Committee, as I have no doubt the Chancellor of the Exchequer has already reminded it, that when he opened his Budget he did bring forward these two proposals as absolutely interdependent and interlocked propositions. When he opened the Budget in the Committee of Ways and Means he said, in reference to the interdependence of these two propositions:
I would like first to say this. In the new taxation proposals which I am going to make I trust the Committee will remember that the scheme I am submitting must be judged as a whole. It contains features which will, I have no doubt, be obnoxious individually in different quarters of the House, but every part of it is related to every other part, and I hope and trust that when it is viewed in its entirety as an organic whole, the scheme will be found to be of help in the present general situation of our affaire."—[OFFICIAL REPORT, 28th April, 1925; col. 64, Vol. 183.]
Again, a little later on the same occasion, he said:
I believe that a moderate diminution of the burden upon wealth in the process of creation, even if that burden is to be transferred to accumulated capital passing at death, will tend to relieve the pressure upon the highly creative facilities of the community."—[OFFICIAL REPORT, 28th April, 1925; cols. 85 and 86, Vol. 183.]
He said that the shifting of the burden from wealth in process of creation to accumulated wealth passing at death was to be commended to the Committee on two grounds. What were those grounds? In the first place he said, "It will tend to relieve pressure," upon what he called, in very picturesque and admirable words, the highly creative faculties of the community. Secondly, he commended it to the Committee on the ground that it was, as he put it, in accord with modern conceptions. I am not quite sure what the Chancellor of the Exchequer meant by being "in accord with modern conceptions." Did he mean the conceptions which are held on the other side of the House, the conceptions of the Socialist party? [HON. MEMBERS: "Hear, hear!"] It is understood on the other side, evidently, that he did mean that. If so, I quite agree. But that seems to be a rather curious ground on which to commend it to a House containing a very considerable majority opposed to hon. Members opposite. However, let that pass. The point with which I am concerned much more than the two hon. Members who last addressed the Committee, is the point made by the Chancellor of the Exchequer that these interlocked and inter-related proposals are intended to relieve the pressure upon the creative faculties of the community. Here I very cordially agree with the Chancellor that this is pre-eminently an object at which, in present circumstances, and indeed in all circumstances, we ought to aim. I believe, with him, that the crushing weight of direct taxation is exercising to-day, and has been exercising for some time past, a most deterrent influence upon the productive activities of the country.
The Chancellor of the Exchequer in his opening speech referred to lack of drive in so many industrial quarters. Is not that lack of drive apparent to everyone who contemplates the present position of industry in this country? Is it not clear that some sort of fillip and encouragement is called for? That is why I feel sure that the Chancellor of the Exchequer is right in the anxiety which he has betrayed in this Budget to give some encouragement to industry. I think that the proposed remission of Income Tax, and, here and now, the proposed remission of Super-tax, will have that effect. Had the matter stopped there, I
should have been with the Chancellor of the Exchequer all the way, but I feel that in this matter the Chancellor of the Exchequer has been like hon. Members opposite a little too careful of the individual and careless of the interests of the community at large. In the many speeches which I have inflicted on the House in regard to taxation and finance, I have always tried to keep the community point of view to the front. I cannot help feeling that the Chancellor of the Exchequer in these proposals has been thinking a little too much of the individual taxpayer. In opening the Budget, speaking of this very proposal to diminish Super-tax to certain classes of taxpayers—because, remember, it is only a very limited measure of relief and only applies to a certain class of Super-tax payers—he said:
The difference between the highly-paid brain worker, who depends entirely upon the exhaustible products of his brain and whose income depends entirely upon his health, and whose provision for his wife and family depends entirely upon his power to build up insurance funds in his lifetime—the difference between the position of that man and the possessor of an equal income derived from investments is too obvious to need any further discussion."—[OFFICIAL REPORT, 28th April, 1925; col. 85, Vol. 183.]
Of course, we all recognise that difference, but I confess I am not with those who only have individual differences in mind. To me it has always been a matter for amazement that the party which holds Socialist principles, which has by its profession special regard for the interests of the community as a whole, should pay such small regard to the interests of the community and should concentrate criticism upon the well-being or hardship to the individual taxpayer. As I have said in regard to this Clause, I find myself in this measure of embarrassment—I should have been perfectly willing had nothing been done in regard to the Death Duties to have left the Super-tax where it is, and I am willing to make this generous offer to hon. Gentlemen opposite. If they will help me to keep the Death Duties as they are at present, I will vote for any Amendment which they may propose at a later stage of this Bill to keep the Super-tax where it is.

Mr. CHURCHILL: May I venture very briefly to make an appeal to the Committee to come to an early decision
on this question as there are several other important matters yet to be considered.

Mr. LAWSON: So far as I am concerned, I will not stand long between the Committee and a decision. The speech delivered by the hon. Member for York (Sir J. Marriott) sounded strangely like the lectures I used to hear from him 20 years ago. Coming as I did from an industrial district, at that time his lectures did not seem very realistic, but coming as I have come this week-end from the industrial area which I represent his speech sound still more unreal. The hon. Member has just said that we on this side have a strange inability to judge or think of the national position as a whole. I should like to ask how much the hon. Member knows of the national position as a whole. Does he know anything about the position in the mining areas of Durham or South Wales or in some of those areas where you can go to house after house, to street after street, and to colliery after colliery, whole areas that are devastated, where the citizens have lost all hope and are in a state of despair such as men have scarcely dreamed of in our lifetime or in the history of our country? That is why, when the right hon. Gentleman gives remission of taxation to people who already have more wealth than they know what to do with, we feel very strongly and speak strongly, and that is why people are feeling inclined to say and do excessive things and extreme things at a time such as this in the nation's industrial experience.
I want this Committee to look at the situation. I want to give hon. and right hon. Members opposite credit for goodwill just as we have goodwill, for being human just as we are, and also for being kindly and considerate, but I want to ask them to go to South Wales or Durham, where we have had 79 collieries closed down during the past 12 months, where there are 40,000 men idle, the finest type of our citizens, to go into their houses, the houses of men who are moderate, and hear what they say about the remission of taxation of this kind. I do not care how the right hon. Gentleman puts it, whether he says it is put on this or taken off that. All that they know is that, when they are suffering and cannot get employment, the right hon. Gentle-
man has handed millions over to people who are already millionaires, and have more wealth than they know what to do with. We hear a good deal and read a good deal in the Press about the Reds. It is not the Reds the Press is afraid of; it is not the Reds that the wealthy classes are afraid of. What they are afraid of is that the patience of the great mass of the workers will become exhausted. Our people have been patient beyond words. We have exhorted them to patience, but our patience is nearly coming to an end, and it is time that this House was relieving people who ought to be relieved, instead of relieving those who have already more than they know what to do with.

Mr. TINKER: I want to say to the other side that I accept this part of the Budget as showing clearly the line of demarcation between our side and theirs. I do not agree with the ex-Attorney-General (Sir P. Hastings) in trying to apologise for what he calls the Reds. I want to say to our people exactly where we stand. On the one side, we have remission of taxation for the wealthy, and on the other side it is to be made up by the poorer classes. You are talking about stopping industry, but taxation has to come from somewhere. £800,000,000 has to be found, and where has it to be found? If you remit it from that side, from the wealthy classes, the poorer classes have to pay it, and so I, for one, am quite satisfied with this part of the Budget as showing exactly where we stand. The Chancellor of the Exchequer has shown courage in dealing with the Budget, and he has shown an infinite capacity for doing the wrong thing in a very energetic manner.
The second point is this. It will arouse the attention of our people to the Super-tax payers. I, for one, can understand these people wanting to remain where they are, and not have attention drawn to them. But attention has now been drawn to where the money is, and many people, such as myself, who were not aware of the vast wealth there was, will realise the great source of taxation whenever we get the chance to tax it. With regard to the Death Duties, I would make this suggestion to the Chancellor of the
Exchequer. When these estates are left with no direct descendants, where there are no sons or daughters, what is there against taking practically the whole of that estate?

The DEPUTY-CHAIRMAN: The hon. Member must not go into the question of Death Duties on this Clause.

Mr. TINKER: I am sorry, but when you were not in the Chair, a Member on the other side was allowed to deal with it, and a speaker on this side said he ought to be allowed to touch upon it also. However, I bow to your ruling.

The DEPUTY-CHAIRMAN: I do not object to a reference to the Death Duties, so long as it is confined to the question of the extent to which these duties are to be increased in parity with the reduction of the Super-tax, but I cannot have the question of Death Duties dealt with in detail.

Mr. TINKER: I was only touching upon it, in order to point out that it would be a good source of revenue next time. As has been pointed out on this side, many of our people are suffering in the depths of poverty to-day, and really, if there was to be any relaxation at all, it ought to come to them. I represent miners, like my hon. Friend who has just spoken, and no one who is acquainted with the circumstances can fail to realise that something is wrong. If the right hon. Gentleman had turned his attention to them, instead of to the Super-tax payers, it would have been far better. I hope the Chancellor of the Exchequer will realise the extreme difficulty in which we are being placed by the relaxation of the burden on the Income Tax payers, and not the people whom we represent.

Mr. NEIL MACLEAN: I, like the previous speaker, and the hon. Member for Chester-le-Street (Mr. Lawson), want to take exception to the way in which this reduction has been made, and also to the arguments that have been put forward urging that reduction. We have been told by Members from the other side of the Committee, as well as from the Chancellor of the Exchequer himself, that this reduction of practically £10,000,000 to the Super-tax payers is a reduction that he has been compelled to make because of the parlous state in which the industries
of this country are at the present time, and he has put forward the plea that by reducing the Super-tax, or by giving to the Super-tax payers a remission of £10,000,000 in the next year, he is likely to benefit some of the industries of the country. It is rather a curious position to take up, that he complains about industry being in a very perilous state, when the very figures he himself has placed before the Committee show that a larger number of people are paying Super-tax this year than last year.
There is this other curious circumstance against this argument that industry is in a bad way so far as the heads of it are concerned, namely, that the total amount of taxable income that Super-tax payers are already drawing out of the industries in this and other countries is greater this year than it was last year. The Chancellor of the Exchequer and his supporters say that industry is in such a bad plight in this country that we must give remission to those who have investments in industry. On the other hand, the right hon. Gentleman says that the number of Super-tax payers has increased, and that a larger number of people in this country are able to pay Super-tax on the amount they are drawing, and that the incomes assessable to Super-tax are larger than in any previous year. Because of that, therefore, because they are getting more money, because the number has increased, it is up to us to relieve them of the terrible burdens that they are suffering under at the present time!
For the life of me I cannot see any logic in such an argument as that. As a matter of fact, I am more inclined still to believe that the description given of the Budget when it was first introduced is a correct description. It was said to be a rich man's Budget. But it is not even a rich man's Budget. It is a Super tax payer's Budget—a Budget for remission on incomes that are already swollen. Reference has already been made to the condition of the miners. I come from a district where unemployment during the past two or three years has been very great, due to the outrageous, the idiotic policy introduced and carried out by the Coalition Government, of which the present Chancellor of the Exchequer was a bright and honourable member. [An HON. MEMBER: "Bright?"] Well, I use the word in a comparative sense.
The Chancellor understands how I mean it. In the area from which I come scores of thousands of people are unemployed, due to the policy I have mentioned. They are unable to find employment. During the last three years large deductions of wages have been made with the same object that the Chancellor of the Exchequer has said he has in view in giving this remission of taxation; for every cut in wages the argument was that it was on account of the pitiful plight of industry. The miners were told that by accepting reductions in wages they were lessening the burdens upon industry, and that there was little chance of industry reviving, and being able to find better employment, unless they allowed these reductions. In the last three years the workers of this country have submitted to cuts in wages which amount to close upon £600,000,000 per year. The workmen have actually submitted to a reduction of wages of £1,800,000,000, approximately one-fourth of the whole cost of the War as borne by Britain.
These men have submitted to that reduction in wages because they were told it was likely to put industry on its feet. How are you to go to these men, I would ask hon. Members on the other side, and tell them that after the sacrifices they have made by allowing such huge cuts in their wages, by allowing such a large sum to go back into the coffers of the employers of labour—how, I say, can you go to these men in the industrial centres and justify the remission of taxation to people who already, as has been stated, possess more than they know what to do with? I tell you frankly; I tell the Chancellor of the Exchequer that he would not again find a place in this House if he had to go to an industrial constituency and justify his policy. He can go down to Epping Forest. He can come back from Epping Forest as a babe from the wood! [Interruption.] Well, we will cover you with leaves. I state again that if an election were taken in any industrial constituency on the issue Budget versus anti-Budget, the Chancellor of the Exchequer would not find one supporter coming back from any industrial constituency to justify his Budget. [HON. MEMBERS: "Ayr!"] Ayr showed there was a majority against the Budget. The Member who one day this week, I expect, will come to the Bar of
this House, comes in on the minority vote of the electors of Ayr. [HON. MEMBERS: "A thousand drop in the poll!"] Yes, but 4,000 drop in the Tory poll. If we are going to have drops, let us have all the drops, and we will find the Tory party have the heaviest drop.
But to get back to the point I was making. I object to a Government, even with the majority that this Government has, carrying through such class legislation as this Budget shows they are intending. With their great majority, and the relay system, they are carrying through their programme under the impression that they are going to delude the workers outside that something is being done for them. Nothing is being done for the workers of this country. The state of industry is worse since the Budget was introduced than prior to that period. Last week there were 60,000 more unemployed, and this week there is a considerable increase in the number. Members opposite who came into the House talking about there being plenty of work for the workers under a Tory Government dare not go back and contest industrial constituencies and make excuses as to why the work has not been found. The Chancellor of the Exchequer, with his varied past, jumping from one theory of politics to another, now comes to this House as a Tory Chancellor of the Exchequer, realising his ambition to become a Chancellor of the Exchequer irrespective of what party he would be Chancellor for. [HON. MEMBERS: "Order!"] I am saying nothing disparaging of the Chancellor. To be Chancellor of the Exchequer is to be one of the highest members of the Government, and to occupy a position like this—

The DEPUTY-CHAIRMAN: The hon. Member really must not wander over all those events. It is not a question of the Chancellor of the Exchequer, it is a question of the Super-tax.

Mr. MACLEAN: It is the Super-tax that is under review, but the Chancellor of the Exchequer is responsible for it, and in dealing with the Super-tax and the remission of taxation, surely I have the right to touch upon occasions in his past when he was not so solicitous for Super-tax payers? The Chancellor of the
Exchequer has come back into this House not as the great democrat which he claimed he was in the past, but he has come here as the protector of the wealthy and not as the protector of the poorer classes. I submit in this Budget that remission of taxation has been given only to the wealthy, and that it has left entirely alone the poorer classes who do pay taxation.
There has been a complete ignoring on the part of the Government of the miserable and despairing lot of scores of thousands of poor people, and the Chancellor of the Exchequer, the Prime Minister, and those who sit behind them have tricked and deluded the workers of the country. They have not only thrown dust in their eyes, but they have also rubbed salt into their sores—[HON. MEMBERS: "Oh, oh!"]—I would like to take some hon. Members who interrupt me to see the misery which is going on, and the conditions under which our poor people are suffering, and I am sure some of those hon. Members would come back much more quickly than they went if they told the poor people that they were voting for a remission of the Super-tax. No Government has a right to remain in office which cannot bring forward some scheme to ameliorate the wretched conditions of the poor, and only come forward with schemes to better their own class and put more wealth into the pockets of those who ought not to have wealth at all, because they have never worked for that wealth.

Major CRAWFURD: The Chancellor of the Exchequer has made an appeal that this Debate should be brought to a speedy close. I think that appeal would have had a better reception if it had not been followed by a speech in which it was perfectly clear what was the general desire of the whole Committee. I desire to associate myself with the speech which has been made by the hon. Member for Peckham (Mr. Dalton) when he said that if the Whips were taken off in the Division on this question the Chancellor of the Exchequer would not carry this proposal at all. During the course of that speech the right hon. Gentleman displayed another of the facets of his dazzling personality when he assumed the part of somebody who feared misrepresentation. He referred to the probable misrepresenta-
tion of his action in this matter which would undoubtedly take place all over the country.
One hon. Member referred to the audacity of the right hon. Gentleman, but that does not seem too strong a word to use when we remember the argument of the right hon. Gentleman last Friday in reference to those who were opposing another of his Budget proposals. I think it would be an advantage to this Committee if the right hon. Gentleman could consider these questions simply and solely on their merits without reference to any probable misrepresentation that may or may not be made. It is simply on the merits that I want to draw the attention of hon. Members opposite to what this Clause means. I want to say at once that on these benches we entirely dissociate ourselves from the right hon. Gentleman's contention that this matter can only be considered in conjunction with the increase in the Death Duties. On these benches, like the hon. Members above the Gangway, we believe that questions are raised when we consider the Death Duties which are entirely foreign to the discussion of whether there should or should not be a reduction in the Super-tax. The hon. Member for Chester-le-Street (Mr. Lawson) and the hon. Member who has just spoken both spoke with feeling and conviction about the contrast between the reduction of taxation on the very rich and the position of the very poor. I am not going to develop that point, except to say this, that there are some of us who represent constituencies not associated with particular industries, but still constituencies where there are large numbers of very poor people, and these considerations apply to those constituencies just as they do to specialised constituencies like those represented by the hon. Members.
I want to call the attention of the Committee to the fact that when the right hon. Gentleman introduced these proposals on 28th April, in the course of his financial statement, he said:
I believe that the Super-tax at its present rate constitutes an excessive burden both on enterprise and on the saving power of the nation."—[OFFICIAL REPORT. 28th April, 1925; col. 85, Vol. 183.]
An hon. and learned Member opposite, in a further quotation, drew attention to
a further phrase of the right hon. Gentleman about the creative spirit. If the right hon. Gentleman wishes to help the creative spirit in industry and wishes to help and to lead industry, he is not going the right way about it by relieving the Super-tax payer. He would do very much better to relieve industry where it needs to be relieved most. We have had two or three speeches this evening, all directed to show, and showing, that the great need of industry to-day is not new capital. The great need of industry to-day is first of all lower cost of production and secondly better wages. The right hon. Gentleman would have done very much better if, instead of taking his £10,000,000 of taxation off the Super-tax payer he had relieved industry of the charges which are proposed to be put upon it with reference to the insurance proposals, and had financed the insurance proposals with the money which he is now giving in relief to the Super-tax payer.
Finally, there is one other point to which hon. Members opposite give a lot of lip service outside this House, although they do not back it up by action in this House. This proposal ought not to be made when you have still got an annual Budget of £800,000,000. If you are going to continue expenditure on the War rate, then you must have War rates for Income Tax and Super-tax. I beg to suggest that these considerations, quite apart from the general considerations dealing with the conditions and welfare of the people, tend to show that this proposal has on its merits nothing whatever to commend it.

Mr. MONTAGUE: On the face of it, the remission of Super-tax is an obvious scandal under the circumstances of poverty and oppression under which a large number of people live at the present time. There is an excuse and justification put forward from the other side in favour of this remission upon the grounds that it will stimulate industry and initiative. As that is the one excuse and the only excuse for this particular point in the Budget proposals of the Chancellor of the Exchequer I think that that is a point that ought to be investigated upon the lines of getting down to fundamental considerations in regard to the matter.
As has already been said by a number of speakers in the Debate, industry in this
country is not wanting capital. There is no shortage of capital available in this country for industries that show opportunity for making profit. Given the markets and given the profit, capital is available; but I want to know what hon. Members on the other side mean when they talk of initiative being the source of industry and employment in this country. I suggest that that is the fallacy running through the whole of this discussion. Industry does not depend upon initiative or stimulus, except so far as separate industries may be competing against other industries. So far as an industry or business is looked upon as a competitor of another industry or business, initiative, advertising, and all the rest of it, of course, apply, but when you take the industry of the nation as a whole, surely the real thing upon which industry depends is not so much the initiative that has been talked about as the markets that are required in order to sell the goods.
Take the big industries here that are suffering the most depression—the mining industry and the engineering industry. Will any hon. Member on the other side tell me that those industries are suffering depression because the supertaxation of wealthy people has prevented them from saving and employing their wealth in the fructification and initiative required for those industries? Of course not. They are suffering from world competition; they are suffering, obviously, from lack of markets. And what applies to those industries applies to the majority of depressed industries in this country. If you could provide the markets, if you could provide the demand for 50 per cent. more goods than are produced in this country, it seems to be perfectly obvious that the resources of industries in this country would be equal to meeting that demand.
I suggest, therefore, that this excuse is an entire fallacy, and, as it is the only excuse, then, if one can show that it is a fallacy, the idea of remitting the taxation on super-incomes in this country is one that can only rest upon a species of class legislation which the people in the country who are watching the course of the Debates on this Budget understand as nothing less than class legislation with the idea of benefiting wealthy people at the expense of the poor. I say that this Budget has been termed with complete
justification a rich man's Budget. The idea that you must levy taxation upon the poor and make more millionaires in order to provide more employment in the country is an entire economic fallacy. The industries of the nation are not suffering from lack of capital. They may be suffering from stagnation of capital, but that is an entirely different matter. That stagnation of capital is due to the general economic conditions of the country, and with regard to foreign trade, and so forth. You are not going to relieve that by allowing extra-wealthy people to retain in their own hands wealth which they are not able to use because the markets are not there, when, at the same time, the wages and conditions of the people are being depressed to such an extent that, with a diminishing foreign market, we are also destroying our home market.
Those seem to me to be fundamental economics of the situation, and that is the reason why the Labour party are opposing this remission of taxation upon people with more money than they know what to do with, with money to burn, while the poor have to pay through the nose for every bit of advantage they may get out of the other proposals of the Budget.

11.0 P.M

Mr. BECKETT: I do not intend to join in any kind of appeal to the Chancellor of the Exchequer to think better of these duties. I am certain that any appeal of that sort is now too late. The matter has received his fullest consideration, and in spite of the objection of many Members of his own party, as evinced by their cheering, to the proposals he is making and the necessity under which he is to force them into the Lobby against their will—[Interruption.] It must be so. You cannot cheer proposals against this Clause and then vote for it if you are entirely free agents. These proposals will be of very considerable help to the political forces in the country opposed to the Government. I am not going to get out of order by referring to any change of party the Chancellor has made because, before he changed, his speeches and articles convinced all intelligent men that there was very little difference between the two parties and that change had no effect on his political horizon or on his political outlook. He told us we must consider the Death Duties and the
Super-tax proposals as one. I am afraid we on this side, in our endeavours to explain his speech to the electorate, will not be able to take that point of view. These are not normal times. If you had normal times, when everyone was as thoroughly comfortable as the Members of this House are, it might be all right to take the collar off one horse and put it on another. But at a time like this, when you have large numbers of babies, according to the Ministry of Health's Report, dying of starvation every year, there is no convincing reason why any small number of privileged children should come into the world and inherit very large sums. If every child was well looked after automatically there might be a case for inheritance. As it is there is a case for even more drastic steepening up of the Death Duties than has been imposed. Therefore, it is impossible to us to excuse a remission of the Super-tax on the ground that the Death Duties are going to be steepened up. I hope the Chancellor or his successor will increase those duties when they have a further opportunity.
The Super-tax is being reduced at a most difficult time in Parliamentary history, when money is urgently needed. There is hardly an hon. Member on the bench opposite, except those in charge of the fighting services, who is not every day telling us, and telling deputations in his Department: "We are very sorry. Our hearts are full of sympathy with you. If only we had the money we would do something to help you, but we have not the money and we cannot do it." The Prime Minister made an eloquent speech at the opening of the Session, in which the great and drastic need for national economy was impressed upon those of us who went into another place to hear that speech. That may be correct. We may be in need of economy, but not in order that the few people who do not appear to economise a very great deal may enjoy even more wealth than they do at present. According to the estimate of Sir Josiah Stamp, the total post-War wealth of the country is something like £15,000,000,000, out of which £12,000,000,00 is owned by 73,690 people. These are the people, and probably a lesser number, who will enjoy the benefit of the presents which the Chancellor of the Exchequer is going to give them out of public funds. I do not appeal to him
to alter it. I do not particularly want him to alter it. I welcome the opportunity, as I believe many other members of my party will welcome it, of going to the country and not only being able to say that the Conservatives are a party of rich men who look after the rich men at the expense of the poor, but of being able to prove the statement up to the hilt by the first Budget which the right hon. Gentleman has made for his party.

Captain GARRO-JONES: I do not—[HON. MEMBERS: "Divide!"] For the consolation of those hon. Members opposite who are always so anxious to get home to their comfortable beds, I do not intend to open the Debate on general principles, but there is one point which I feel constrained to submit for the consideration of the Committee. The Chancellor of the Exchequer pleases some people by saying that this relief in regard to Super-tax is only a transferring of the burden from one part of the body to another where it can be more conveniently carried. He pleases those who are opposing the taxation of rich men by telling them that the relief must be given on the ground that it will be a relief of industry. I do not believe that these reliefs in Super-tax and Income Tax are devoted to industry. I believe that on the very day that these reductions of taxation were announced these rich men felt the money jingling in their pockets. The Chancellor of the Exchequer comes here and paints to us, as he is so able to paint, a picture of rich men saying to each other, "Here is a relief of £500 which our benevolent Chancellor of the Exchequer has given to us. We will have a new machine in the workshop. We will employ another 20 men here or another 10 men there." I believe that is a fantastic picture. These people say, "We will have a new town house." [Laughter.] Hon. Members opposite are amused. I do not suggest that they can buy their town house for £500, but for that amount they can rent one, and keep it empty for half the year. If they do not want another town house, they can have a new shoot in Scotland with the relief that the Chancellor of the Exchequer has given them, or, at the very least, some of the least fortunate of hon. Members opposite can have a 30 guineas or 40 guineas box at Ascot at the expense of the Chancellor of the Exchequer.
Speaking in all seriousness, I believe that these reliefs on the Super-tax and Income Tax are a bad thing. To the business man who receives a relief of £500, knowing that it will be re-imposed later on his son, who may have little experience and be anxious to develop the business, I do not believe it is any consolation to know that this relief is going to be given. It is a bad thing, and I believe that the proposal would be rejected by a majority of this Committee if the suggestion of the hon. Member above the Gangway were accepted and the Government Whips taken off and the matter left to a free vote of the Committee.

Mr. MORRIS: It would be very interesting to know from the Chancellor of the Exchequer what has prompted him to give this remission of taxation. I have understood that the canons of taxation are that a tax should be certain, that it should be definite and that it should be levied upon those whose shoulders are able to bear it. The Super-tax is a tax which fulfils every one of these three canons. The Report of the Commissioners of Inland Revenue, which has just been issued, shows that in every year from 1913 to 1924 the actual receipts by the Exchequer from this source have exceeded the Budget estimate. In some years they have exceeded the estimate by over £2,000,000, and in no case was the amount of the excess less than £130,000. That shows that in every year the people responsible for the payment of Super-tax were not only able to pay the Super-tax but were able to pay a great deal more than the Chancellor of the Exchequer anticipated. According to the same report, the number of Super-tax payers last year was 89,000, and their aggregate income was £519,000,000. That is an average income of somewhere about £5,000 or £6,000 a year. To these people, earning these huge sums—[HON. MEMBERS: "Getting!"]—getting, receiving these huge incomes, the Chancellor of the Exchequer makes a remission of £10,000,000, that is an average of £110 a year, or a dole of £2 a week, to people who are already in receipt of sums ranging between £5,000 and £6,000 a year. I have heard the Chancellor of the Exchequer condemn the system of doles paid to the unemployed in this country,
and yet he makes a remission of £2 a week in favour of 89,000 people in receipt of from £5,000 to £6,000 a year.

Mr. JOHNSTON: And no qualifying period.

Mr. MORRIS: And no qualifying period. This Budget, with its system of balances, reminds me of Virgil's tree of golden leaves; as soon as a branch was torn off on one side another branch grew elsewhere to replace it. In the case of this Budget a remission of taxation is granted here, and more taxation is put on elsewhere, but the remission is invariably made in favour of those who are well able to pay.

Captain BENN: I wish to make a remark in reference to the first speech made from these benches, by the right hon. Member for Norwich (Mr. Hilton Young). I had not the opportunity of hearing it, but I understand that he has already said, what I ought to make plain, that he does not represent in any sense whatever the hon. and right hon. Gentlemen on these benches. [HON. MEMBERS: "Do you?" and "Who does?"] The Chancellor of the Exchequer will be in complete sympathy with that point of view. His argument, as I understand it, was something like this, that there was a measure of equity that should be applied to all grades of taxpayers, and that you could not remit to the indirect taxpayer and the direct taxpayer without in equity remitting something to the Super-tax payer. The whole of this discussion, it seems to me, proper to look at in the light of what is the burden that these taxes are intended to discharge. We are not living in ordinary times. We are living in times of an enormous load caused by the War. You must take that into account in considering the remissions of taxation. It always seemed to me during the War that when the bodies of men were conscripted there was a great deal to be said for the conscription of wealth. At the end of the War plans were proposed, and there was a very general measure of agreement as to the principle, for a levy upon War wealth. They were followed by other plans of the Labour party for a general capital levy, the practicability of which has appeared to many people to be a matter of discussion—I will not say more
than that. My argument is all based on this same theory. When you remember that there was a poll tax on blood, it is not too much to ask that there should be a tax on wealth.
It must please right hon. and hon. Gentlemen on the Government side to be led by a Chancellor who frankly defends his proposals on the ground that he believes in a Capital Levy. That, I am sure, has already caused increased gratification, which has been manifest in so many speeches. It must also gratify right hon. and hon. Gentlemen opposite to have as Chancellor a man who has taught them that Sir William Harcourt's proposed Death Duties, which they opposed vigorously and an account of which they prophesied the ruin of the country—they now have a Chancellor of the Exchequer who is going to lead them into the Lobby in support of an increase of those Death Duties. Furthermore, they must feel very pleased indeed that the ban proposed by the Patronage Secretary even upon speech, partial attendance and total silence has been lifted; and that they are allowed a little run with an Amendment. But I know that not one right hon. or hon. Gentleman who put this Amendment on the Paper is going to vote for it. Why not? If it be a good Amendment, surely they are not to be terrorised. But, of course, if the Chief Whip would take off his minions and liberate right hon. and hon. Gentlemen to vote on the merits of the case, it is quite likely that this Clause would disappear from the Bill. The Chancellor of the Exchequer has defended it on the ground that it is a balance. He said: "I put less on the Super-tax payer and more on the Death Duties." But he used a very curious phrase, and it is on that that I wish to ask him a question. Turning in defence of this proposal to the distinguished Members of the House who put down this Amendment, he said:

"This is not permanent." What does he mean by that?

Mr. CHURCHILL: I did not say anything of the sort.

Captain BENN: The OFFICIAL REPORT will show.

Mr. CHURCHILL: I said that this principle of an increase in the Death Duties, in order to effect a relief to the Super-tax payer, was a principle that I did not consider to be of general and permanent application, that is to say, it was caused only by the circumstances of the present time and by the need of giving psychological stimulus to enterprise. I never said anything remotely resembling the meaning which the hon. and gallant Gentleman has attributed to me.

Captain BENN: The right hon. Gentleman talks of a "psychological stimulus," but what is exactly meant by saying there is no permanency in the principle. I am afraid it means that, having remitted the tax to the Super-tax payer this year, the right hon. Gentleman will remit it to the payer of Death Duties next year, and that he is only taking advantage of the first year of office, the year most remote from the Election, to do the thing which least commends itself to the electors, namely, to remit the tax to the Super-tax payer Then, the way being clear, he will in the future remit some portion of the heavy burden of Death Duties. There are points which have not been raised so far in the Debate. I do not want to traverse again ground which has been traversed, but the arguments put forward in opposition to this decrease seem to be overwhelming, and I propose to support them in the Lobby.

Question put, "That the Clause stand part of the Bill."

The Committee divided: Ayes, 264; Noes, 138.

Division No. 155.]
AYES.
[11.22 p.m.


Acland-Troyte, Lieut.-Colonel
Baldwin, Rt. Hon. Stanley
Boothtby, R. J. G.


Agg-Gardner, Rt. Hon. Sir James T.
Balfour, George (Hampstead)
Bourne, Captain Robert Croft.


Ainsworth, Major Charles
Balniel, Lord
Bowater, Sir T. Vansittart


Albery, Irving James
Banks, Reginald Mitchell
Bowyer, Capt. G. E. W.


Alexander, Sir Wm. (Glasgow, Cent'l)
Barclay-Harvey, C. M.
Boyd-Carpenter, Major A.


Allen, J. Sandeman (L'pool, W. Derby)
Barnett, Major Sir Richard
Briggs, J. Harold


Amery, Rt. Hon. Leopold C. M. S.
Barnston, Major Sir Harry
Briscoe, Richard George


Applin, Colonel R. V. K.
Beamish, Captain T. P. H.
Brocklebank, C. E. R.


Ashley, Lt.-Col. Rt. Hon. Wilfrid W.
Betterton, Henry B.
Brooke, Brigadier-General C. R. I.


Ashmead-Bartlett, E.
Birchall, Major J. Dearman
Broun-Lindsay, Major H.


Astor, Maj. Hn. John J. (Kent, Dover)
Blades, Sir George Rowland
Brown, Maj. D. C. (N'th'l'd., Hexham)


Atholl, Duchess of
Blundell, F. N.
Buckingham, Sir H.


Bull, Rt. Hon. Sir William James
Hartington, Marquess of
Percy, Lord Eustace (Hastings)


Burman, J. B.
Harvey, G. (Lambeth, Kennington)
Perkins, Colonel E. K.


Butler, Sir Geoffrey
Harvey, Major S. E. (Devon, Totnes)
Perring, William George


Cadogan, Major Hon. Edward
Haslam, Henry C.
Peto, G. (Somerset, Frome)


Campbell, E. T.
Hawke, John Anthony
Philipson, Mabel


Cautley, Sir Henry S.
Henderson, Capt. R. R. (Oxf'd, Henley)
Pielou, D. P.


Cayzer, Sir C. (Chester, City)
Henn, Sir Sydney H.
Power, Sir John Cecil


Cayzer, Maj. Sir Herbt. R. (Prtsmth, S.)
Hennessy, Major J. R. G.
Pownall, Lieut.-Colonel Assheton


Chadwick, Sir Robert Burton
Henniker-Hughan, Vice-Adm. Sir A.
Preston, William


Christie, J. A.
Herbert, Dennis (Hertford, Watford)
Price, Major C. W. M.


Churchill, Rt. Hon. Winston Spencer
Herbert, S. (York, N. R., Scar. & Wh'by)
Radford, E. A.


Churchman, Sir Arthur C.
Hilton, Cecil
Ramsden, E.


Clarry, Reginald George
Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.
Reid, Captain A. S. C. (Warrington)


Clayton, G. C.
Hogg, Rt. Hon. Sir D. (St. Marylebone)
Reid, D. D. (County Down)


Cobb, Sir Cyril
Hohler, Sir Gerald Fitzroy
Remer, J. R.


Cochrane, Commander Hon. A. D.
Holbrook, Sir Arthur Richard
Rhys, Hon. C. A. U.


Cohen, Major J. Brunel
Holland, Sir Arthur
Rice, Sir Frederick


Cooper, A. Duff
Holt, Capt. H. P.
Robinson, Sir T. (Lancs., Stretford)


Cope, Major William
Hope, Capt. A. O. J. (Warw'k, Nun.)
Ruggles-Brise, Major E. A.


Couper, J. B.
Hopkins, J. W. W.
Russell, Alexander West (Tynemouth)


Courtauld, Major J. S.
Horne, Rt. Hon. Sir Robert S.
Rye, F. G.


Croft, Brigadier-General Sir H.
Howard, Captain Hon. Donald
Salmon, Major I.


Crook, C. W.
Hudson, Capt. A. U. M. (Hackney, N.)
Samuel, A. M. (Surrey, Farnham)


Crookshank, Col. C. de W. (Berwick)
Hudson, R. S. (Cumberl'nd, Whiteh'n)
Samuel, Samuel (W'dsworth, Putney)


Crookshank, Cpt. H. (Lindsey, Gainsbro)
Hume, Sir G. H.
Sandeman, A. Stewart


Cunliffe, Joseph Herbert
Hunter-Weston, Lt.-Gen. Sir Aylmer
Sanders, Sir Robert A.


Curzon, Captain Viscount
Huntingfield, Lord
Sassoon, Sir Philip Albert Gustave D.


Dalkeith, Earl of
Hurd, Percy A.
Savery, S. S.


Dalziel, Sir Davison
Inskip, Sir Thomas Walker H.
Shaw, R. G. (Yorks, W. R., Sowerby)


Davidson, J. (Hertf'd, Hemel Hempst'd)
Jackson, Lieut.-Colonel Hon. F. S.
Shaw, Capt. W. W. (Wilts, Westb'y)


Davidson, Major-General Sir John H.
Jackson, Sir H. (Wandsworth, Cen'l)
Sheffield, Sir Berkeley


Davies, A. V. (Lancaster, Royton)
Jacob, A. E.
Shepperson, E. W.


Davies, Maj. Geo. F. (Somerset, Yeovil)
Jephcott, A. R.
Skelton, A. N.


Davies, Sir Thomas (Cirencester)
Jones, G. W. H. (Stoke Newington)
Slaney, Major P. Kenyon


Davison, Sir W. H. (Kensington, S.)
Kidd, J. (Linilthgow)
Smith, R. W. (Aberd'n & Kinc'dine, C.)


Dean, Arthur Wellesley
Kindersley, Major G. M.
Smith-Carington, Neville W.


Dixey, A. C.
Kinloch-Cooke, Sir Clement
Smithers, Waldron


Doyle, Sir N. Grattan
Lamb, J. Q.
Somerville, A. A. (Windsor)


Drewe, C.
Lane-Fox, Lieut.-Col. George R.
Sprot, Sir Alexander


Eden, Captain Anthony
Leigh, Sir John (Clapham)
Stanley, Col. Hon. G. F. (Will'sden, E.)


Edmondson, Major A. J.
Lister, Cunliffe-. Rt. Hon. Sir Philip
Stanley, Lord (Fylde)


Elliot, Captain Walter E.
Little, Dr. E. Graham
Steel, Major Samuel Strang


Erskine, Lord (Somerset, Weston-s-M.)
Locker-Lampson, Com. O. (Handsw'th)
Strickland, Sir Gerald


Everard, W. Lindsay
Looker, Herbert William
Stuart, Hon. J. (Moray and Nairn)


Fairfax, Captain J. G.
Lord, Walter Greaves-
Sueter, Rear-Admiral Murray Fraser


Falle, Sir Bertram G.
Luce, Major-Gen. Sir Richard Harman
Sugden, Sir Wilfrid


Fanshawe, Commander G. D.
Lumley, L. R.
Tasker, Major R. Inigo


Fermoy, Lord
Macdonald, Capt. P. D. (I.of W.)
Templeton, W. P.


Fielden, E. B.
Macdonald, R. (Glasgow, Cathcart)
Thompson, Luke (Sunderland)


Finburgh, S.
McDonnell, Colonel Hon. Angus
Thomson, F. C. (Aberdeen, South)


Fleming, D. P.
Macintyre, Ian
Thomson, Sir W. Mitchell (Croydon, S.)


Ford, P. J.
McLean, Major A.
Tinne, J. A.


Forestier-Walker, Sir L.
MacRobert, Alexander M.
Tichfield, Major the Marquess of


Forrest, W.
Malone, Major P. B.
Tryon, Rt. Hon. George Clement


Foster, Sir Harry S.
Manningham-Buller, Sir Mervyn
Wallace, Captain D. E.


Foxcroft, Captain C. T.
Margesson, Captain D.
Ward, Lt.-Col. A. L. (Kingston-on-Hull)


Fraser, Captain Ian
Marriott, Sir J. A. R.
Warner, Brigadier-General W. W.


Fremantle, Lieut.-Colonel Francis E.
Mason, Lieut.-Col. Glyn K.
Warrender, Sir Victor


Gadie, Lieut.-Col. Anthony
Milne, J. S. Wardlaw-
Watson, Sir F. (Pudsey and Otley)


Ganzoni, Sir John
Mitchell, S. (Lanark, Lanark)
Wells, S. R.


Gates, Percy
Mitchell, W. Foot (Saffron Walden)
Wheler, Major Sir Granville C.


Gault, Lieut.-Col. Andrew Hamilton
Mitchell, Sir W. Lane (Streatham)
Williams, Com. C. (Devon, Torquay)


Gee, Captain R.
Moore, Sir Newton J.
Williams, Herbert G. (Reading)


Gilmour, Lt.-Col. Rt. Hon. Sir John
Moore-Brabazon, Lieut.-Col. J. T. C.
Wilson, Sir C. H. (Leeds, Central)


Glyn, Major R. G. C.
Moreing, Captain A. H.
Winterton, Rt. Hon. Earl


Goff, Sir Park
Morrison, H. (Wilts, Salisbury)
Wise, Sir Fredric


Grant, J. A.
Morrison-Bell, Sir Arthur Clive
Wood, B. C. (Somerset, Bridgwater)


Greene, W. P. Crawford
Nelson, Sir Frank
Wood, Rt. Hon. E. (York, W. R., Ripon)


Grotrian, H. Brent
Neville, R. J.
Wood, E. (Chest'r, Stalyb'dge & Hyde)


Guest, Capt. Rt. Hon. F. E. (Bristol, N.)
Newman, Sir R. H. S. D. L. (Exeter)
Wood, Sir Kingsley (Woolwich, W.).


Guinness, Rt. Hon. Walter E.
Nield, Rt. Hon. Sir Herbert
Wood, Sir S. Hill- (High Peak)


Hacking, Captain Douglas H.
Nuttall, Ellis
Woodcock, Colonel H. C.


Hall, Lieut.-Col. Sir F. (Dulwich)
Oakley, T.
Worthington-Evans, Rt. Hon. Sir L.


Hall, Capt. W. D'A. (Brecon & Rad.)
O'Connor, T. J. (Bedford, Luton)
Young, E. Hilton (Norwich)


Hanbury, C.
O'Neill, Major Rt. Hon. Hugh



Harland, A.
Ormsby-Gore, Hon. William
TELLERS FOR THE AYES.—


Harrison, G. J. C.
Pennefather, Sir John
Commander Eyres Monsell and




Colonel Gibbs.


NOES.


Adamson, Rt. Hon. W. (Fife, West)
Ammon, Charles George
Barker, G. (Monmouth, Abertillery)


Adamson, W. M. (Staff., Cannock)
Attlee, Clement Richard
Barnes, A.


Alexander, A. V. (Sheffield, Hillsbro')
Baker, J. (Wolverhampton, Bilston)
Barr, J.




Batey, Joseph
Hayday, Arthur
Salter, Dr. Alfred


Beckett, John (Gateshead)
Henderson, Rt. Hon. A. (Burnley)
Scrymgeour, E.


Benn, Captain Wedgwood (Leith)
Henderson, T. (Glasgow)
Shiels, Dr. Drummond


Bowerman, Rt. Hon. Charles W.
Hirst, G. H.
Short, Alfred (Wednesbury)


Broad, F. A.
Hirst, W. (Bradford, South)
Simon, Rt. Hon. Sir John


Bromley, J.
Hudson, J. H. (Huddersfield)
Sinclair, Major Sir A. (Caithness)


Charleton, H. C.
Hutchison, Sir Robert (Montrose)
Sitch, Charles H.


Clowes, S.
Jenkins, W. (Glamorgan, Neath)
Slesser, Sir Henry H.


Cluse, W. S.
John, William (Rhondda, West)
Smillie, Robert


Collins, Sir Godfrey (Greenock)
Johnston, Thomas (Dundee)
Smith, Ben (Bermondsey, Rotherhithe)


Compton, Joseph
Jones, Henry Haydn (Merioneth)
Snell, Harry


Connolly, M.
Jones, J. J. (West Ham, Silvertown)
Snowden, Rt. Hon. Philip


Cove, W. G.
Jones, Morgan (Caerphilly)
Stamford, T. W.


Cowan, D. M. (Scottish Universities)
Kelly, W. T.
Stephen, Campbell


Crawfurd, H. E.
Kennedy, T.
Sutton, J. E.


Dalton, Hugh
Kirkwood, D.
Thomas, Rt. Hon. James H. (Derby)


Davies, Rhys John (Westhoughton)
Lansbury, George
Thomas, Sir Robert John (Anglesey)


Day, Colonel Harry
Lawson, John James
Thomson, Trevelyan (Middlesbro, W.)


Duncan, C.
Livingstone, A. M.
Thorne, G. R. (Wolverhampton, E.)


Dunnico, H.
Lowth, T.
Thurtle, E.


England, Colonel A.
Lunn, William
Tinker, John Joseph


Evans, Capt. Ernest (Welsh Univer.)
MacDonald, Rt. Hon. J. R.(Aberavon)
Trevelyan, Rt. Hon. C. P.


Fenby, T. D.
Mackinder, W.
Varley, Frank B.


Garro-Jones, Captain G. M.
MacLaren, Andrew
Viant, S. P.


George, Rt. Hon. David Lloyd
Maclean, Neil (Glasgow, Govan)
Warne, G. H.


Gibbins, Joseph
March, S.
Watson, W. M. (Dunfermline)


Gillett, George M.
Maxton, James
Watts-Morgan, Lt.-Col. D. (Rhondda)


Gosling, Harry
Montague, Frederick
Welsh, J. C


Graham, D. M. (Lanark, Hamilton)
Morris, R. H.
Westwood, J.


Graham, Rt. Hon. Wm. (Edin., Cent.)
Morrison, R. C. (Tottenham, N.)
Wheatley, Rt. Hon. J.


Greenall, T.
Murnin, H.
Whiteley, W.


Greenwood, A. (Nelson and Colne)
Naylor, T. E.
Williams, C. P. (Denbigh, Wrexham)


Grenfell, D. R. (Glamorgan)
Palin, John Henry
Williams, David (Swansea, East)


Griffiths, T. (Monmouth, Pontypool)
Paling, W.
Williams, Dr. J. H. (Llanelly)


Groves, T.
Pethick-Lawrence, F. W.
Williams, T. (York, Don Valley)


Grundy, T. W.
Ponsonby, Arthur
Wilson, C. H. (Sheffield, Attercliffe)


Guest, J. (York, Hemsworth)
Potts, John S.
Wilson, R. J. (Jarrow)


Guest, Dr. L. Haden (Southwark, N.)
Rees, Sir Beddoe
Windsor, Walter


Hall, F. (York, W. R., Normanton)
Richardson, R. (Houghton-le-Spring)
Wright, W.


Hall, G. H. (Merthyr Tydvil)
Riley, Ben
Young, Robert (Lancaster, Newton)


Hamilton, Sir R. (Orkney & Shetland)
Ritson, J.



Hardie, George D.
Robertson, J. (Lanark, Bothwell)
TELLERS FOR THE NOES.—


Harris, Percy A.
Robinson, W. C. (Yorks, W. R., Elland)
Mr. Allen Parkinson and Mr.


Hartshorn, Rt. Hon. Vernon
Rose, Frank H.
Charles Edwards.


Hastings, Sir Patrick

CLAUSE 14.—(Allowances in respect of earned income and allowances from total income of persons of age of 65 years).

Mr. DALTON: I beg to move, in page 10, line 7, to leave out the word "one-sixth," and to insert instead thereof the word "one-fifth."
This Amendment is to increase the earned Income Tax allowance from one-sixth to one-fifth. The millionaires have had their pound of flesh, and I now make a plea for the small wage-earners who come just above the Income Tax exemption level. The effect of the Amendment would be to give a very slight—compared with what the super-tax payers have just received—remission of Income Tax for that section of the community which works for its living. I do not propose to occupy much time in moving this Amendment, although we do propose to take a division on it in order that the country may be able to distinguish clearly between the attitude of the Government towards the super-tax payer and the attitude of the Government to-
wards the wage-earner with £3 or £4 a week. I hope, however, a division may be rendered unnecessary by the Government accepting this very reasonable Amendment.

The FINANCIAL SECRETARY to the TREASURY (Mr. Guinness): The hon. Member has moved to leave out "one-sixth" and insert "one-fifth." There is a second Amendment on the Paper by a Member of the Liberal Party to increase the allowance still further to one-fourth. The first proposal would mean a loss in revenue of £3,100,000 in a full year, but the proposal of the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy) would cost a good deal more, because not only would he increase the allowance to one-fourth, but by a further Amendment, he would help the better-to-do class, giving them the benefit up to a higher level by raising the maximum, which is now £250, to £400. I do not think we need attach too much importance to this Amendment, seeing that this is the fourth year in succession that it has been moved.

Captain BENN: Will the right hon. Gentleman say what the proposal of the hon. and gallant Member for Hull (Lieut.-Commander Kenworthy) would cost?

Mr. GUINNESS: £9,750,000 in a full year, as against £3,100,000 in the case of the more limited Labour Amendment, which affects a smaller class of income-tax payers. The Amendment was first moved four years ago by the hon. Member for Rothwell (Mr. Lunn), who was Parliamentary Secretary, Overseas Trade Department, in the late Labour Government. The next year it was also moved by an hon. Member on the Labour benches. The following year it was moved by a Liberal, and the Labour Party, who had been so staunch in their support on two former occasions, when they had the opportunity of doing something definitely turned the Amendment down. That was the fact that consoled me when I heard the threat of the hon. Gentleman who moved the Amendment—that it would enable the country to distinguish between the attitude of the Government towards the richer or poorer classes. I should rather say that it will enable them to judge between the professions of the Labour Party when they are not responsible, and their performances when they are. The country will remember that whereas the Labour Party last year turned down the Amendment that they had supported when in Opposition we have brought forward a definite remission on earned income costing £7,500,000 in a full year.

Captain BENN: While I intended to move a later Amendment standing in the name of the right hon. and gallant Gentleman the Member for Central Hull (Lieut.-Commander Kenworthy), the issue can be fairly covered on the present Amendment;

therefore, I propose to say a few words on it. After all has been said as to the Labour Party moving this Resolution one year and opposing it the next, and the following year the Resolution being proposed and opposed, it leaves us here, that so far as I can see, the party with which I am associated has the only clean record on the matter. But the real point to consider is the balance of the Budget: whether the Budget has come to the relief of those who need it most by putting the burden on the strongest, or whether the reverse is true! Therefore, the right hon. Gentleman the Member for Colne Valley (Mr. Snowden) seems to me to have a good answer, certainly as regards last year, because any remission of taxation that could be made was made in favour of the poorer people, and that was as much as could be done in one year. That is the real defence and the real reason that justifies the moving of this Amendment to-day, not the merits of this particular proposal, because there are many proposals, as the hon. and gallant Gentleman will see when the new Clauses are reached. But the real question is the balancing of the Budget. Does it justify us in asking that the poor should have same consideration? That is the case made by the Mover of the Amendment. Really, I was surprised at the courage of the Financial Secretary. He does not pretend to explain why it was better to give £10,000,000 to those who did not need it than £3,000,000 to those who did! He gave no justification whatever of his action. I do not think any hon. Gentleman opposite would care to get up and justify the Government's action.

Question put, "That the words 'one-sixth' stand part of the Clause."

The Committee divided: Ayes, 246; Noes, 119.

The following Amendment stood on the Order Paper in the name of Lieut.-Commander KENWORTHY:

In page 10, line 9, to leave out the word "one-sixth" and insert instead thereof the word "one-fourth."

The DEPUTY-CHAIRMAN: The Amendment standing in the name of the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy) is covered by the decision of the Committee on the last Amendment.

Captain BENN: I beg to move, in page 10, line 9, to leave out the words "two hundred and fifty" and to insert instead thereof the words "four hundred."
I hope the Government will be able to accept this Amendment.

Mr. GUINNESS: I am sorry that I cannot satisfy the hon. and gallant Member's anxiety for the Super-tax payer in this respect. We have given all the remissions we can, and we do not think that we should be justified in granting such a large remission on earned income as is involved in this Amendment. I cannot understand how the hon. and gallant Member can reconcile moving this Amendment with the indignation which he just now expressed at our remission of taxation in the interests of the Super-tax payer. Anyhow we have not got the necessary resources to provide for the remission and we must ask the Committee to keep the Bill as it stands.

Captain BENN: I think the wording of the Clause is very obscure. It cer-
tainly was not very clear to me. I shall not press the Amendment.

Amendment, by leave, withdrawn.

The following Amendment stood on the Order Paper in the name of Mr. H. WILLIAMS:

In page 10, line 14, after the word "he," to insert the words "or she."

The DEPUTY-CHAIRMAN: I shall not make up my mind whether or not to select the Amendment which stands in the name of the hon. Member for Reading (Mr. H. Williams) until he explains it a little more. I am not quite clear as to the effect it will have.

Mr. H. WILLIAMS: The object is to make it quite clear that the relief provided will apply to widows and spinsters. I understand that under the Interpretation Act the word "he" means "she," but in this particular case there is a reference to "his wife living with him" and I fear that it might lead to an interpretation of the word "he" that would not be in accordance with the wishes of the House. I understand, however, that my second Amendment—in line 14, after the word "or," to insert the words "in the case of a married man"—would give the necessary interpretation, and would not have a prejudicial effect in other cases where the word "he" is used to include the word "she."

The DEPUTY-CHAIRMAN: After the hon. Member's explanation, I think I shall be justified in not selecting the
Amendment, leaving it to stand over for consideration until the Report stage.

Clause ordered to stand part of the Bill.

CLAUSE 15.—(Assessment of weekly wage-earners to be half-yearly instead of quarterly.)

Mr. D. GRENFELL: I beg to move, in page 11, line 20, to leave out the words "and every subsequent year."
The object of this Amendment is to ensure that this new practice of half-yearly assessments shall not be continued if it is found to be prejudicial to the interests of the wage earners and an incumbrance to the tax inspectors. We find that the incidence of the tax, owing to the fall in wages and irregularity in employment, has now passed away from a very large number of workers who were called upon to pay each quarter. If this proposal be carried, it may involve hardship on a workman who is in regular employment for six months and without regular employment for the next half-year. For that reason we say that this should not be adopted as a permanent practice. If the right hon. Gentleman desires to adopt it, he should watch very closely the number of wrong assessments which are made in the half-year as compared with the number under the present system. We ask him not to establish this as a permanent Measure, but that it should be only for the year 1925–26.

Mr. GUINNESS: I think the hon. Member's apprehension has no real foundation in fact. The reference to future years is in no way binding, and it will always be open at any future time to put it right if hardship is found to arise. In view of the reduction of the rates of Income Tax, coupled with the fall in the earnings of weekly wage-earners, the cost of collection in these cases has become quite out of proportion to the return, and, if the Committee will allow us to collect Half-yearly instead of quarterly, we shall save £100,000 a year. There will really be no hardship, because, although we quite appreciate that the weekly wage-earner is not in a position to meet big bills, yet, under this system of half-yearly collection, he will actually be called upon, in every case except that of the single man with an income of more than £350, to pay a less lump sum down at the end of his half-year than he used
to pay for a quarter in the days when this was first started, and when the Income Tax rates were higher. On the lower scale it works out in this way: A married man without dependants only reaches the half-yearly obligation to pay a week's wages if his income is over £501. In that case the obligation and the weekly wage are £9 12s. In 1919–20 the man with that same income on a weekly basis, namely, £9 12s. 11d., had to pay, not £9 12s. 11d. for a half-year, but £10 4s. 5d. for a quarter, and, if he was able to find that burden bearable by means of the machinery of stamps and so on, I do not think hon. Members opposite need have any apprehension that any real difficulty will be found under this new arrangement.

Mr. D. GRENFELL: I am afraid I did not make myself clear. My point of view was with regard to an annual instead of a six-monthly assessment. The explanation of the right hon. Gentleman, however, satisfies me that the arrangement is not intended to be permanent, and I am prepared to withdraw the Amendment.

Captain BENN: No. I think the hon. Gentleman is carrying concession too far when he proposes to withdraw his Amendment. What the right hon. Gentleman wants to do is to settle this question now and bury it. The Income Tax is an annual tax, and, if the right hon. Gentleman takes out these words, it will mean that he will have to come to the House each year to justify this procedure, which is what my hon. Friend desires. We only desire a one year's test. The right hon. Gentleman tells us that we can move Amendments next year, but we know what that means from experience in the past, when our Amendments have had no success. If this Amendment is justifiable—and a case has been made for it—I cannot see why it should not be accepted, and why The Financial Secretary should not come forward himself next year and justify any other course that may then be necessary.

12 M.

Mr. HAYDAY: I hope the Financial Secretary will reconsider the position he has taken up, and will agree with this Amendment. One must admit that there has been some concession in the departure
from the quarterly assessments, but these quarterly assessments were instituted during a war period, when wages were abnormal and there was more or less continuity of employment for persons engaged in industry. The position now is that seasonal trades are back again, and it is possible for persons to be employed in a seasonal trade, as they are in large numbers, and while during one period of six months they may reach the taxable limit, during the next four or five months they may have a depreciated income, and then it is for them to apply for a refund of any payment they may have made. But there are great difficulties in the way, and I think it will be appreciated that the average workman very often gives up all chance of recovering, when he takes up correspondence with the tax-collecting people, any refund that may be due to him. If the right hon. Gentleman will agree to strike out these words, the Government could then come forward next year, after their experience. If the experience is bad, there will be no need to raise the question again, while if it is good, and a case is made out, the position will be strengthened. If, however, it is left to a minority to move an Amendment on what may appear to be a quite subsidiary matter, of less importance than the larger points that are involved in a Budget, their difficulties are much greater in getting an Amendment through than would be the case if the Chancellor of the Exchequer came forward to justify the continuance of the arrangement in such circumstances.

Mr. TREVELYAN THOMSON: We on these benches think that a reasonable case has been made out for this Amendment. Apart from the merits of the case, surely it is only right that the Committee itself should keep control over its procedure by requiring these words to be struck out, so that next year the House will have its say as to whether it is desirable that they should be put in or not. In the first place, it is a practical suggestion, in connection with this new-working of the collection of Income Tax, that we should see how this new arrangement works; and, secondly, on the constitutional point, we should have the control ourselves.

Mr. CHURCHILL: This is a very limited point, and, if it can be so handled
as to be satisfactory to the general body of the Committee, I should be very anxious to take that course. I think, myself, that there will be no hardship or difficulty in this matter, and, as has been pointed out by the Financial Secretary, the amounts to be paid, as a general rule, on the half-yearly assessment, will be less than they were on the quarterly assessment only two or three years ago. That is due to the very large remission which has been effected, with general concurrence, in regard to this class of taxpayers. I do not think there will be any hardship or difficulty, but still, if the Committee feel that they would like to keep this matter under review for another year, I should be willing to meet that wish and leave out the words "and every subsequent year," it being understood that if things go right next year we should then insert the words and leave them in, because we do not want each year to have a large number of small points coming up in connection with taxation; we want to get matters settled as much as possible. We are ready to have a year's trial before asking the Committee definitely to commit themselves.

Amendment agreed to.

Clause, as amended, ordered to stand part of the Bill.

CLAUSE 16. (Claims for exemption in respect of income of charities and for repayment of tax in respect of interest paid to banks, and right of appeal in connection therewith.

Sir HENRY BUCKINGHAM: I beg to move, in page 12, line 12, after the word "by" to insert the words "the General Commissioners or ".
This is a small Amendment which will not cost the Exchequer anything, and I hope the Chancellor of the Exchequer will accept it. I am afraid that the Clause, although it seems very harmless, contains something rather sinister. On the face of it, it is proposed for the purpose of codifying and regularising claims made on behalf of charitable institutions for exemption from Income Tax. It is desirable that codification should take place, as the position of charities in respect of Income Tax has been up to now rather anomalous. Some claims are to be made to the General Commissioners and other claims are at present made to the Special
Commissioners. I should be glad to see an attempt to codify the claims, but I am a little doubtful of the method proposed. Under this Clause the claim of a charity is to be made to the Commissioners of Inland Revenue, and these Commissioners shall, on proof of the facts to their satisfaction, allow the claim accordingly.
If the Committee accepts the Clause as it stands, they are giving to the Inland Revenue Commissioners judicial powers which at present they only enjoy in one or two cases—cases of a particular nature. It is an extremely dangerous practice to grant judicial powers to executive officers who are carrying out the Income Tax law. If the Committee like to take the risk it is, of course, their business but I consider it to be my duty to point out the danger. If the Committee is prepared to trust the Commissioners of Inland Revenue with these judicial powers, I would call attention to the procedure which follows. If the Commissioners on first considering the case laid before them give an adverse decision on the claim, the particular charity which may be aggrieved by the decision have the right to appeal to the Special Commissioners. I hope that nothing I may say will be taken as in any way reflecting on the impartiality or skill of the Special Commissioners, because I know no body of men who have earned a better reputation for fair mindedness than the Special Commissioners. The judicial authorities appointed under the Income Tax Acts from the very beginning have been the Special Commissioners and the General Commissioners. My object in this Amendment is to provide that any appeal from a decision of the Inland Revenue Authorities should not only be heard by the Special Commissioners but at the choice of the party concerned by the General Commissioners. There is nothing difficult in deciding these cases. I have had to decide several cases. Charities are in a peculiar position when they are asking for remission of Income Tax, because they have to satisfy certain conditions clearly laid down in the Income Tax Acts. But the General Commissioner or the Special Commissioners are perfectly capable of deciding upon the justice of the claims. As to the appeal to the Inland Revenue Commissioners, if the Committee care to accept that part of the Clause I suggest to them that they will be protecting the interests of the appellants by giv-
ing them a right of appeal to the General Commissioners as well as to the Special Commissioners, who are, it must be remembered, under control of Somerset House. Therefore, the appeal from the Commissioners of Inland Revenue to the Special Commissioners is rather like an appeal from Cæsar to Cæear, and I suggest that it would be some alleviation if the right of appeal to the General Commissioners were also included. I suggest that my proposed Amendment is a very harmless one, and would avoid the continual overlooking and ignoring of the General Commissioners which is so gradually creeping into these annual Finance Acts. I do not know whether the right hon. Gentleman will accept my Amendment, but if he does not intend to do so I shall be glad to hear any reasons which he may have against it

Mr. GUINNESS: I think that the hon. Baronet is really under-estimating the importance of this Clause. It is rather more than codifying the existing provisions. It gives the right of appeal where no such appeal has existed before. There are certain cases in which a charity is not now entitled to a personal hearing, which go to the Special Commissioners, in which the only possibility is, as I gather, a decision on affidavits. I believe that it is a great advantage that a power of appeal with a personal hearing should now be granted. The hon. Baronet may not be aware that this appeal will lot go to the Executive, not to the Com-missioners of Inland Revenue, but to a quasi judicial body, the Special Commissioners, who will be in a very good position to bring about uniform principles of administration throughout the country. I should be the last to say one word against the efficiency of the General Commissioners, but there am many different bodies, and obviously it would be disastrous to Income Tax administration if, in these complicated matters of what is and what is not to be considered a charity, you got conflicting decisions. These decisions as to charities are extremely complicated. They go back in a long string of decisions arising out of the famous Statute of Elizabeth, and it has been thought well that we should get a coherent code of decisions on them, because this does not only affect the Income Tax, but it also affects other duties, such as the Entertainments Duty.
It is entirely impracticable administratively to have the appeal heard, as the hon. Baronet suggests, not by one body in a position to bring about uniform principles, and avoid conflicting decisions, but by several hundred different bodies who, however efficient they are, and however much they try, could not avoid producing incoherent and conflicting results.

Sir WILLIAM DAVISON: I am very sorry to hear what my right hon. Friend has just said. If his argument be carried to its logical conclusion it means that the General Commissioners, who are looked to by the Income taxpayers of this country as the body which will safeguard their rights and protect them, is a body to which it is not safe to entrust appeals. To say that these charitable appeals are more complicated than the appeals which come before the General Commissioners, say, of the City of London, every year, in the course of their ordinary duties, is a travesty of the facts of the case. This seemed to be a reasonable Amendment, and I should have thought the Chancellor would have accepted it at once. It only asks that in these charitable appeals the General Commissioners who constitute the appellate tribunal, to whom the country look to deal with Income Tax matters, should be substituted for the Special Commissioners, who are, after all, officials of the Inland Revenue. At this late hour I would ask the Chancellor to meet hon. Members on his own side with the same generosity as he has extended to the Opposition, especially as this proposal is very much more in accordance with the spirit of the Income Tax Acts than the previous proposal.

Sir HENRY SLESSER: I hope the Government will not accept the Amendment. I intervene in this Debate for the first time, only because I have had some experience of dealing with these cases in the courts, and I agree with the right hon. Gentleman the Financial Secretary that on these technical matters it is essential that the cases should be heard by a body with great experience like the Special Commissioners. Otherwise you may get a multiplicity of cases stated, and you may multiply appeals in the High Court. From every point of view it is more advantageous that these matters
should be dealt with by the Special Commissioners.

Mr. DENNIS HERBERT: I support the hon. Member for South Kensington (Sir W. Davison) in what he has said. There is a question of principal involved here. It has always been the principle that these matters should be decided in the first instance by the representative of the taxpayers, namely, the General Commissioners. The hon. and learned Member who has just spoken overlooks the fact that the General Commissioners in many cases, are the best persons to hear appeals in the first instance, because they know the local circumstances affecting the cases. The magnitude of the cases which have been heard by the General Commissioners, not merely in the City of London, but in all parts of the country, is so great and the system has worked so well except in a comparatively small number of cases that it is worth doing something to maintain the old system and the old theory that these questions should in the first place be decided by the representatives of the taxpayers. This is another and I would almost say, an insidious attempt, on the part of the tax collecting machine, to oust the General Commissioners from that position which the taxpayer has always tried most jealously to maintain.

Mr. P. HARRIS: It is very significant and to me always suspicious, when the two Front Benches get together. There is always a desire to strengthen the bureaucracy and get these things into the hands of the officials. Everybody knows that conditions and circumstances vary in different parts of the country, and it is right and proper that we should listen to the reasonable appeal made by the hon. Member for Guildford (Sir H. Buckingham). There should be local people who understand local conditions and are in sympathy with the taxpayers point of view, to go into these matters on the merits and not merely to take the official line. The natural tendency of the Special Commissioners is to support the official view and to have everything stereotyped in one form. The Financial Secretary ought to be more sympathetic towards this reasonable and harmless proposal.

Mr. J. JONES: Always having great sympathy with the poor, I wish to express my regret that the right hon. Gen-
tleman has not seen fit to listen to the Bolshevists on his own benches who are so very anxious to have a court established to suit themselves. It is like having a court held in hell with the devil as the presiding magistrate. How are these Commissioners selected and what are they? I have only heard of them recently. Most of them are people liable to Super-tax or excess Income Tax of one kind or another and naturally they will shed tears of blood over the woes of their fellow victims. They would like to abolish taxes altogether except so far as the poor are concerned. We can keep on paying all the time. Nobody grumbles and there are no Commissioners to represent us. That is the position of the men who are paying more than they think they ought to pay and I am one of them.

Mr. HERBERT: On a point of order. May I ask whether the hon. Member is a charity?

Mr. JONES: No, but I think I have expended a great amount of charity in listening without interruption to the speeches which have been made. So far as we are concerned we have every sympathy with the poor rich; we only want the same amount of sympathy to be expressed for the people who are really poor. Hon. Members opposite want to be relieved of their taxation and then the leeway will be laid up by the people who have no means. Take it off the rich and put it on the poor—that is the old philosophy. I do not care What your Commissioners are but the workers know where they cam go to get relief.

Mr. HERBERT: The charity.

Mr. JONES: They can go to the guardians, of course.

Mr. HERBERT: I said the charity.

Mr. JONES: We know where they are, but when you want relief you call them commissioners, not poor law guardians. They are commissioners appointed by yourselves. You select them.

The CHAIRMAN: The hon. Member is addressing himself to me, and I do not want to get relief.

Mr. JONES: You would not, but you would be better if you did.

Mr. CHURCHILL: There can be very little doubt that in these completely
technical matters connected with charities, such as questions of how far they fall within the scope of the various provisions of the various Acts, it is much better to have a tribunal like the Special Commissioners as the source for giving decisions rather than the General Commissioners. I know that my right hon. Friend, who has much knowledge on this subject, wishes to appreciate the prestige of the General Commissioners, and I can say on behalf of the Government that they have not the slightest desire to express any want of confidence in them, but here there are 700 bodies all over the length and breadth of the country, and we should get an immense number of conflicting views upon these matters and of different interpretations as to whether charities fell within or without a particular Act. I hope, therefore, he will not press the Amendment.

Amendment negatived.

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Mr. PETHICK-LAWRENCE: There is just one point on this Clause that I am not quite certain about, and that is as to the significance of Sub-section (1, b) of the Clause. I put a question to the Chancellor a few days ago relating to a form of evasion of tax practised by certain people through single premium insurance. The method of procedure of these people is as follows:—They effect an insurance by means of a single premium and borrow on it. Therefore they obtain the use of the money they had before and they escape paying the Income Tax and Super-tax upon the whole of the interest upon that money. This is a very serious deprivation of the revenue, and is, I understand, a growing practice by which certain undesirable rich people endeavour to evade their liabilities, and. thereby throw a burden on the rest of the community.

Mr. GUINNESS: The premium to which the hon. Member has drawn attention does not arise in this Clause in any way. It is not a matter of Income Tax but is under the administration of Supertax. This particular sub-section is merely to provide for the first time a convenient machinery for deciding what income tax allowances can be made on account of payment of interest to banks.

Mr. PETHICK-LAWRENCE: Is it not a question of how much a man can set off against his income?

Mr. GUINNESS: I am advised that it does not concern this point at all.

Captain GARRO-JONES: There is a point of considerable importance. I think we ought to have an announcement from the Chancellor or the Financial Secretary. We all admire the diligence which the Income Tax collectors show in their task. There are numerous cases of harsh and unconscionable methods adopted by the collectors which make necessary the complicated system of appeals which is dealt with in this Clause. In a Court of Law counsel for the prosecution, as representative of the State, is not supposed to press his case beyond the limits of fair and almost judicial argument. I think that ought also to be the case with collectors of Income Tax. At the present time great carelessness is displayed by these officials in sending out demands. Many times I have had people come to me asking, "What do you think of this?" and I have told them to send it back with the simple observation, "This assessment is ridiculous." In several cases the assessment has come back within a week or two half what it was. That is an unfortunate state of affairs, and it could be remedied if the system of collectors could be altered.

The CHAIRMAN: This Clause deals only with charities, so far as I understand it, and it seems to me that the hon. and gallant Member is going outside this provision.

Captain GARRO-JONES: I regret if I have broken the rules, but I would ask a question with regard to Sub-section (4). We cannot be expected to carry the Statutes of England about with us, and when a Clause of this kind has reference to the Income Tax of 1918 we might have a brief explanation from the Financial Secretary as to what it means.

Mr. D. HERBERT: I would also ask the right hon. Gentleman to consider this question with regard to paragraph (b) of Sub-section (1). Is not this particular question of the right to a return one which may arise in conjunction with other claims? I want the right hon. Gentleman to tell me whether this claim that is dealt with under paragraph (b) is not likely to be one claim on a form in which
there may be a number of other claims, the decision of which goes, not to the Special Commissioners but to the General Commissioners. Is he not, therefore, by paragraph (b) putting a case in which on one claim one part of the claim may have to go to the General Commissioners and the other part to the Special Commissioners?

Captain BENN: I only rise to congratulate the Government on the docility of their followers. Three of their members have moved one Amendment which was scorned by the Chancellor, and one other has asked a question to which no reply is vouchsafed.

CLAUSE 17.—(Provision as to Income Tax on dividends of certain securities vested in custodian or administrator of enemy property.)

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Major CRAWFURD: I do not know whether it is relevant to discuss on this Clause the doings of the Income Tax Commissioners in general, but I would like to put one point to the Financial Secretary if I am not out of order.

The CHAIRMAN: I do not know what the argument will be, but Clause 17 refers to dividends of certain securities vested in custodian or administrator of enemy property.

Clause 18 (Continuation of Section 21 of Finance Act, 1923) ordered to stand part of the Bill.

CLAUSE 19.—(Amended rates of estate duty.)

Sir ROBERT SANDERS: I beg to move in page 13, line 13, after the word "shall" to insert the words
so far as regards personal property and real property other than agricultural.
After the facility of the other side in getting concessions from the Chancellor, I hope our turn may have come. It is my object to show that in regard to the increase in Estate Duty there is a case for special treatment of agricultural property. I think I can prove that the Chancellor's system, by which the remission made in Super-tax is said to
balance the increase of revenue from Estate Duty, does not apply in this particular case. In such a balance as the Chancellor has foreshadowed I think it should be provided that the interest of 5 per cent. on the increased sum charged for Estate Duty should be the same as the amount saved by the reduction of the Super-tax. Assuming on the average that that is so with regard, say, to personal property bringing in an income of 5 per cent., it certainly is not so—and the balance is shifted against the taxpayer—when the valuation of the capital is so high that the income actually derived from it, instead of being 5 per cent., is, as with the case of landed estates so often happens, actually under 3 per cent. of the amount on which Estate Duty is paid. That is the case, very often with regard to agricultural land, and the reason is that the capital valuation is out of all proportion to the income actually received. I assume that the Chancellor wishes to maintain, in regard to all the sorts of property in which his Budget deals, that balance on which he says his Budget is based. If so, it is only fair to the owners of this class of property that he should either reduce the rate charged on estates that are valued on the present scale or else reduce the scale on which the valuations are made.
This Amendment is directed to the former course. There is a new Clause on the Paper in the name of my hon. and gallant Friend the Member for Rye (Sir G. Court-hope) and others, which lays down the method by which the latter course could be adopted. I do not know which the Chancellor would prefer, but if he will adopt that of my hon. and gallant Friend he will satisfy me, and if he adopts mine I think he will satisfy my hon. and gallant Friend. I do not wish—and it is not necessary for the purpose that I have in view—to attack the present system of valuation. It is undoubtedly the business of the valuer to try to arrive at the price at which the article valued can be sold at the present moment, and I must say I am sometimes absolutely amazed at the price at which agricultural land is sold in the open market. That only bears out my contention that, if you levy the increased rate on the full valuation, you do not maintain the balance the Chancellor has foreshadowed. Of course I am quite aware it may be said that if a a man is, for
sentimental or other such reasons, prepared to give an uneconomic price for the land he buys, it is his fault, and he. must expect the tax gatherer to come down and make a demand on him. That may apply to the new purchaser, but it does not apply to the old owner and I am quite sure it is not in the interests of our country life to compel the owners of estates of, say, 2,000 or 3,000 acres to sell, or break up, these estates. Not only it is not in the interests of the country, but it is not treating them fairly, because you cannot sell land in the same way, or at the same expense, as that at which you can sell stocks or shares. It is not a matter of 2/6 in the £100: the commission may sum up to 4 per cent. or 5 per cent. These constant sales are a curse to the agricultural industry. They do more than anything else to bring about that feeling of insecurity of tenure of which we have heard a good deal from the benches below the gangway opposite, but which is, undoubtedly caused to a great extent by this system under which the present owner is forced to sell the whole, or a portion, of his estate. That is not only the feeling of landlords, but I have here an extract from a memorandum issued by the Farmers' Union in answer to a request sent out by the Minister of Agriculture. They say:
The National Farmers' Union, an organisation of working farmers, makes no claim to a special knowledge of the problems which beset the agricultural landlord, but the Union cannot be oblivious to the manner in which Death Duties have contributed to the break-up of estates and the creation of a shortage of capital required for the equipment of the land. These considerations are of obvious importance since anything which induces a withdrawal of capital from the industry inevitably obstructs the attainment of the Government's aim of a real agricultural policy. We regret the new Budget should have contained a proposal to add to the difficulties of the industry in this matter.
Quite apart from that, I am convinced that you are doing a bad day's work if you give the country squire notice to quit. The villages would lose by it, and, in regard to all country work, the counties would lose men who have done, and are capable of doing in the future very valuable work indeed. Therefore it is as a matter of public policy, as well as a matter of consistency with the system the Chancellor of the Exchequer has laid
down, that I ask him to give special treats merit to the special case made out for agricultural land.

Colonel Sir GEORGE COURTHOPE: I wish to support the Amendment, and in doing so am very glad to have heard the chorus of friendly interruption from the opposite benches which suggested that if this Amendment be accepted the opposition will all be satisfied. [HON. MEMBERS: "You would be satisfied! "] I would be satisfied, and I think some Members of the Opposition would be satisfied. I also want to put a reason for the Amendment from a rather different angle which I think will appeal to my right hon. Friend, the Member for Carnarvon Boroughs (Mr. Lloyd George). One of the great reasons, in my opinion, for the difficulties of the agricultural community is the lack of working capital caused by the fact that a great many tenant farmers having, say, a capital of £15 per acre available, have been compelled to put the whole of that working capital into the purchase of their farms and they are dependent upon what they are able to borrow for the cultivation of their land, with the result that the national loss and risk has been very much increased thereby. Anything that is done to increase the probability of the break-up of estates and the enforced purchase by tenants of their holdings—I am not arguing against occupying ownership, for I am in favour of it—is to be avoided. I am arguing against the enforced purchase by tenants, who cannot afford the purchase, of their holdings, but are compelled to do so by the almost economically compulsory break-up of estates by land owners through Death Duties. Death Duties are the greatest form of compulsion towards the break up of estates, and the tenant farmers are put in the position that they are deprived of the working capital necessary for adequate cultivation of their holdings. The national loss is very considerable, and for that reason I recommend this Amendment to the Chancellor of the Exchequer, and I hope he will see his way to accept it. Some of us have put down a series of Amendments and new Clauses on the Paper, designed to relieve the burden of Death Duties on land, but we shall feel, if this Amendment be accepted, that
very large relief is given; probably the greatest relief the Chancellor of the Exchequer has in his power to give at the present moment, and, probably, we will not press the Clauses we have put down on the paper. But I do press the desirability of giving a special concession to agricultural land in these cases where agricultural landowners are hit, because it is in the national interest that agricultural landowners should not be hit.

Mr. CHURCHILL: I am aware of the very weighty and strong feeling which exists among supporters of the Government on the subject of the increase I am proposing in the Death Duties. I Have never been under any illusion on that subject. I can assure my hon. Friend that I have from the beginning felt that in laying an additional burden upon the Death Duties we were taking a very serious step, and one which undoubtedly gives rise to hardship and dissatisfaction among many of those who support the Government. But we have already passed a Clause which relieved the Super-tax payer of approximately the same amount as has been proposed to place upon the Death Duties and I am bound to find the necessary revenue to pay for the concession which has been made to the Super-tax payers. Therefore it would not be possible for me to make any modification or mitigation in the Clause imposing the increased Death Duties, or the Schedule of the Duties, which effects in a substantial manner the revenue which I require. Agricultural land as such plays a very small part in the Death Duties in this country. I was surprised when I came to the Treasury to see how small a part it played. It is between 1/18th and 1/20th part of the total sum of, I think, over £60,000,000 which is collected under the heading of Death Duties. I do feel the force of some of the arguments that have been used in regard to agricultural land and in placing agricultural land in a position different from other forms of property. It is quite true as my right hon. Friend, the Member for Wells (Sir R. Sanders) who moved the Amendment pointed out, that when a landed estate is to be broken up for Death Duty, the portion cut off costs 2, 3, 4 and even 5 per cent. to realise which has to be borne by the successor, the property owner, whereas if stocks and shares
have to be sold, only a very small commission, a quarter per cent. sometimes, is all that is required to transfer the appropriate block of shares. That is one of the reasons and there are other reasons brought forward which certainly must weigh and ought to weigh with me.
But we have not set out in this Budget to make any concessions to agricultural land at all. It may be in the future—in this Parliament or in future Parliaments—that the general question of the burden resting on agriculture will come up, but in the conception of the Budget of this year no such idea formed part of the plan which I proposed and the Cabinet approved. But it was not my intention to add in a serious manner to the burdens resting upon agricultural land, and I find that it would be possible for me, without upsetting the balance of the Budget or depriving myself of the means of paying for the cost of the tax remission, to exempt agricultural land, as such, from the operation of the increased scale of Death Duties. It would be necessary to limit this concession entirely to agricultural land as such. For instance, agricultural land having a building value, stands in a different category. The process which it seems to me we could adopt would be as follows: The estate would consist of agricultural land and of other forms of property. It would be valued as a whole and the figure thus fixed would regulate the rate of duty. But then you would proceed to value the agricultural land separately, and where agricultural land had no building value it would be charged at the existing rates of duties and not at the increased rates; but where the land had a building value, the agricultural land with the building value would be charged in respect of its agricultural value only at the existing rates of duty. It will cost me £225,000 in the present year, and £500,000 in the full year, or 1/20th of the yield of the increase in rates which has to be imposed.
I am obviously not going to ask the Committee to assent to a change of this character in the Budget proposals to-night. I could not accept the Amendment which my right hon. Friend has proposed for that reason, and also because the words have to be more carefully stated and rather more, elaborately framed, but I should be prepared to make this matter definite by the time the Report stage
comes on in ample time for the House to consider it and to place upon the Paper an Amendment which will leave agricultural land, as such, where it is in this matter at a cost of £500,000 in a full year.

1.0 A.M.

Mr. LLOYD GEORGE: This is a very serious departure from the principles upon which these duties have been assessed from the first moment they were initiated. It was a principle of complete equality between the various owners of property and various classes of property. There was no distinction between the classes of land. That principle has been accepted by every party in this House. For the first time the Chancellor of the Exchequer has announced a departure from that principle, and that at one o'clock in the morning, without any opportunity for the House to consider the importance of the proposal. The right hon. Gentleman has said that he does not propose to do it to-night, but what he does propose is that notice should be given that on the Report stage we shall vote either for or against his proposal; that we are not going to have a Committee stage at all upon the proposal, which is a complete departure from every principle and policy. I cannot conceive upon what ground he is doing it. The Death Duties, of course, are a very onerous burden upon other classes of property, and there is no reason why special favour and privilege should be extended to owners of agricultural land as compared with others. The right hon. Gentleman seems to think that all the rest of the property in this country is in stocks and shares. That is not the case. It is not the case of a manufacturer who has converted his concern into a limited liability company. That is not the case of the small holder of property who conducts a business without any help from the public. Why should agricultural land be favoured? This is class legislation of the worst kind. I agree with everything that has been said by the right hon. Gentleman with regard to the effect upon agricultural property from the point of view of the breaking-up of estates. Do they really imagine that this concession of £500,000 is going to make a difference? Not the slightest. Anyone who goes through the accounts will know that perfectly well. The Income Tax and Super-tax and the in-
crease of Death Duties in 1919 are so onerous that any Government wishing to deal with this problem ought not to deal with it in the way of discriminating between one class of the community and another. It is a thoroughly vicious principle. They ought to deal with the problem of agricultural land as a whole. What difference is this going to make? From the point of view of the breaking-up of estates it is not going to delay that process by a single year and it is simply establishing a principle which is a pernicious one in itself. It is established for the first time by this Amendment and when the Chancellor of the Exchequer proposes it to this House, I shall resist it. There was an Amendment that the same advantage should be given to agricultural land in respect of repairs when you estimate it for Death Duties. That is given in the computation of the Income Tax. It is a direct incentive to the land owner to do his duty towards his property and there is a good deal to be said for that. That was in the interests of the community but this proposal is without principle and a departure from the equality of treatment to which every taxpayer is entitled.

Sir R. SANDERS: I beg to ask leave to withdraw my Amendment. [HON MEMBERS: "NO!"] In doing so, I wish to thank the Chancellor of the Exchequer for the concession which he has made.

The DEPUTY-CHAIRMAN: The right hon. Gentleman does not appear to have the leave of the Committee to withdraw the Amendment.

Mr. PETHICK-LAWRENCE: I must really express my amazement at the suggestion of the Chancellor of the Exchequer that he will accept this Amendment. The right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) has put the case very strongly from the point of general equity as between owners of different classes of property, but I would venture to suggest to the Chancellor of the Exchequer that he will, by accepting some such proposal as this, bring about inextricable confusion in the whole state of Death Duties settlement. This Amendment is quite meaningless unless it is taken in conjunction with
two or three more of the complicated Amendments which follow later and we shall be getting our Death Duty administration in inextricable confusion. I suggest that the Chancellor should think over this again between now and the Report stage and that he should reconsider his decision. I cannot think he is giving the attention to the matter which it deserves and for my part I and the members of my party will give it our very determined opposition.

Mr. T. WILLIAMS: There is certainly something to be said why this concession should not be granted. It is perfectly true that the Mover simply selected an agricultural area where little or no land is in use or about to be used for building purposes. There may be something to be said for the proposal, but when we remember that the figures the Minister of Health gave only a few days ago when he told us that some 56,000 acres of land had been taken for housing purposes during the last four years, for which £4,000,000 had been paid, or an average of £200 per acre, it seems to me that the breaking up of an estate is a very profitable proposition. If the Mover of the Amendment would take land ownership of the whole instead of taking that portion called agricultural land then, I think, their proposal would not be accepted by the majority of this House. While extra burdens are being placed upon those least able to bear them, Super-tax does not or ought not to commend itself to further reductions being granted to this particular class. May I also remind the Chancellor of the Exchequer that the particular section to whom he is contemplating giving half a million of pounds are the section who are not going to make any contribution to the new pensions scheme? I want to suggest that the individual who merely owns the land and receives rent is going to make no contribution to the new pensions scheme. It seems to me that it is the greatest monstrosity of the Budget, and one that the Committee ought to resist to the very last moment. Surely the Chancellor of the Exchequer can find a section of the community well deserving assistance for the services they render to the community, and certainly a section who are much more in need than those he proposes to help. As the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) has said, to have made
this concession at this time of the night, when a fair proportion of Members have already left the House, is not playing the game with the House. The Chancellor of the Exchequer is certainly playing the game of the hon. and right hon. Gentlemen opposite, but in its most comprehensive Sense it is not playing the game with the House. I hope Members on this side will resist this encroachment upon the ordinary elementary rights of the poorer section of the community by making certain concessions to those who have already had certain concessions made. I hope it will be resisted to the very last.

Mr. FENBY: I would like to ask the Chancellor of the Exchequer to give a little fuller and more detailed information to the suggestion that he has made to the Committee in response to Members behind him. We are told that if the proposal to be made in this Clause is carried through it will do something to destroy the system of landlordism we have in this country. I do not intervene in this Debate in order to join in any attack upon the present landlord system of this country or the landlords. The present Minister of Agriculture, if he is correctly reported, recently made use of a statement that the present system of landlordism had broken down. He is a very high authority, but there may be two opinions about that. The Chancellor of the Exchequer to-night is adopting, in my opinion, a preferential system of dealing with the matter that does not commend itself to me. Why should he feel so tender in his economic conscience for that large body of supporters behind him and the Prime Minister concerning a question of landlordism and estates? Why not have turned a sympathetic ear to other sections of the taxpayers of this country equally as well? May I ask him that when he suggests that he will have a different valuation for purely agricultural land and land that has a building value, how he or anyone else will be able to draw up and set in operation a watertight piece of machinery that will decide either the one or the other?
May I say this? The Chancellor of the Exchequer ought to know that so far as the prospective building value of agricultural land is concerned to-day, ten years ago the prospective building value of what was agricultural land
purely was confined to about two or three miles on the borders of growing towns and cities. But to-day nobody can tell within five, ten or fifteen miles of the borders of any growing town or city what is the prospective building value of agricultural land, because transport has altogether revolutionised the idea of values of land in our agricultural areas. In recent years land that was let for agricultural purposes at less than £1 per acre is being sold today at 10s. a yard by the same owner That increase has been due to the development of the estate by the enterprise and growth of the community and not of the particular owner. We are told the return from agricultural estates compared with the capital value is very small. That very often is the fault of the landlord and of no one else. Those of us who have had to do with the agitation for obtaining land for small holdings and allotments—whenever we want land for that purpose in small quantities—we soon find out when we make inquiries how much is the value put upon the land by the particular owner. I would like to protest against what, in my opinion—I do not say it offensively but very sincerely—is the preferential treatment of the Chancellor of the Exchequer in regard to this question. Let us take the Super-tax payer. I hope I may be in order as I want to hang a point upon that. If you take the Supertax payer he is getting relief out of this Budget. How does he come to pay Supertax. Very largely it was not his own fault. During the War many men became rich not because of their ingenuity or efficiency but because they could not help it because of the necessity of the nation at that particular time. In my opinion we borrowed far too much during the War and taxed far too little, with the result that a great many people at the end of the War and to-day were in the position to be asked to pay Super-tax, and they are receiving relief from the Chancellor of the Exchequer on the money they are enjoying which is absolutely and honestly the property of the State. From that I want to come to land. Who is the man who is asked to pay this Estate Duty. You may know his resting place but you do not know his address. It is the man who follows on, who inherits the estate who pays the duty. The amount of money the Chancellor of the Exchequer has virtually promised to give by his concession is not
going to prevent the break up of estates. I am not going to quibble at the amount, be it large or small; I object to the principle for this preferential treatment. It is entirely wrong and very dangerous. I echo the protest of my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George) against it, and I hope no countenance whatever will be lent by the parties on this side of the Committee to the suggestion that has been made.

Mr. LAMB: I do not propose, at this time of the morning, to attempt to keep the Committee long, especially in view of the fact that the Chancellor of the Exchequer has promised to make a, proposal which I think will deal very adequately with the request that we have made from this side. But the last speaker says that it will be difficult to deal with the question in view of the fact of the building value of certain land. Let me point out to him that the Chancellor said it was his intention not to include land with a building value, and his argument that you cannot tell what value building land has is one which I think he will find will not be borne out in fact when the valuers come to deal with the question. At any rate, it is one which would not touch by a long way the bulk of the land which would be covered by this Clause. The hon. Member for Don Valley (Mr. T. Williams) as quite under a misunderstanding when he said this concession would lie with the rent-receiving landlord only. It would not. There are, unfortunately, many men at the present time who are and have been forced to become occupying owners, who are themselves responsible for the cultivation of the land. And let me say here that there has been no greater blow to the agricultural industry that the one which, largely by the Death Duties, has compelled the breaking up of these large estates, and for this reason. There is no industry in the country which is raising part of its capital at such a low rate of interest as the agricultural industry. Landlords, in the past, have provided their share of the capital at even no rate of interest whatever, simply receiving for themselves the amenities of living on their estate, and it is one of the greatest blows to the industry as a whole that the men should be forced, not from
their own desire, but from the mere fact of having to retain their holding and their home to become occupying owners of the farm they had previously rented from a landlord. It has made them take from the capital which was necessary for the actual cultivation of the land a certain proportion to be locked up, to, part pay for the farms which they have had to buy. The right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) said he did not believe in the differential treatment being made to agricultural land. There is a certain force in his argument, but unless this concession is made here you are going to agree to an increase of the charges upon land. That is what I object to, and I do sincerely hope that the result of the Chancellor's foreshadowed concession may possibly mean that agricultural land will not suffer as undoubtedly it will suffer if this Clause is left as it is.

Mr. J. HUDSON: I think the Chancellor of the Exchequer has managed to plunge us into something of what I consider to be a first-class political issue. He smiles, rejecting that point of view. All the same, the issue in which we are involved is out of all proportion in its importance to the £500,000 he proposes to rob the Exchequer of in order to meet this claim of the landlord class. According to the Chancellor of the Exchequer, this Budget is a Budget of balances. I wonder what balance he is going to provide in order to meet this particular concession. That is not dealt with at all. We shall be glad to know before this matter is concluded what he does propose to set off as a balance against this. There is a very large number of issues—the superphosphate issue is one—upon which he might provide a balance, but I do not press that matter so closely for the reason that I, in common with all the Members on these benches, am utterly opposed to any attempt at all at the present moment to give any concession of any kind to a landlord class that has done go well out of the community, particularly during the last few years. Hon. Members opposite forget that all improvements that have recently been made in the community through railways and new roads have increased the value of agricultural land enormously. [An HON. MEMBER: "Nonsense."] Well, an hon. Gentleman says "Nonsense." I will give him an example. There has
been recently a case in the Manchester district—the famous De Trafford estates—that has made in the last few years tens of thousands of pounds, I believe hundreds of thousands of pounds, out of the sale of land near the Manchester Ship Canal. But now they go further a field with their purely agricultural land—ten, twelve, or fourteen miles out of Manchester, to the Wilmslow and Alderley districts. And at the present moment, for purely agricultural land upon which to-day you may still see the ploughman engaged, they will ask you, if you ask for a quarter of an acre of land for building an ordinary cottage, £500 or £600 an acre, demanding that you shall buy a full half acre plot, insisting that you shall pay £2,000 or £2,500 for the cottage or house that you put on that plot. These are the conditions that this landlord class to-day is extracting from the community. The men who want to get out of Manchester into the country places to live on this agricultural land are met by demands of that sort, and yet it is the De Trafford Estates that will receive out of the Chancellor's proposal, with regard to all that land, that the De Trafford Estates classify as agricultural land—

Mr. CHURCHILL: The hon. Gentleman has really not understood what I endeavoured to convey. I have no doubt it was my fault. The valuation is made in exactly the same way as it is made now by the authorities, and there is no question of the landlord describing his property either as agricultural or building land. The valuation of the estate is taken for the purpose of assessing the total value, and no concession is given in regard to any of this building value of which the hon. Member is talking. That will continue to bear, not only the existing rates of duty, but the enhanced rates of duty. It is only so far as purely agricultural value exists, either beside the building value or underneath the building value, that the duty will be left.

Mr. HUDSON: Even if it is the case that the valuation is given officially, there is much land in the possession of the De Trafford Estate at the present time that will be exempted of part of the taxation that the Chancellor proposes in connection with this scheme. Why should that estate company have such a benefit? This is another example,
and a glaring one, of the Chancellor of the Exchequer's willingness to give sops to those who least need them. The right hon. Gentleman the Member for Carnarvon Boroughs asked what could have been the motive which led the Chancellor to make this concession. It is not in keeping with any of the things he did in the past with regard to landlordism. There is not the least justification in the Chancellor's speeches for this concession he is making. What has happened is this. He has given sop after sop to a greedy class, but he realises that he has really failed to get the complete sympathy and support of the Members behind him. He goes from bad to worse, giving sops where he finds the pressure keenest. I intend to oppose with all my strength this proposal, and I believe the great mass of the members of my party will offer equal opposition to this proposal.

Mr. RHYS: I congratulate the Chancellor of the Exchequer on the courage with which he has faced this issue. There is no doubt whatever that the Death Duties have hit the industry harder than anything else could. I would just develop one step further an argument of an hon. Member who has just spoken. When farmers have to pay for their land they, as a rule, put down one-third in cash and two-thirds are left on mortgage. The farmer has, therefore, to pay interest on the mortgage, and that stops the money being put back into the land. Consequently we see fences broken down and land not in the clean condition in which good agriculturists like to see it. Unless we do get some sort of relief we are going to find the industry will really suffer to such an extent that it will not recover. I am perfectly prepared to defend the good landlord. He has fulfilled a function which is of inestimable value to the country. He had improved the land and provided the roads.

Mr. B. SMITH: And supplied the labour?

Mr. RHYS: I have always said Labour and Capital should co-operate.

Mr. B. SMITH: The fellow on top all the time.

Mr. RHYS: My hon. Friend says the man on top all the time. I do not know what he means by that. Be that as it may, I hope that in the future we shall
even see a further relief from the burdens on agriculture. We are always told this is the basic industry of the country, but when a proposal is made to benefit it there is a storm of protest from hon. Members on both sides of the Gangway opposite. I propose to support this proposal of the Chancellor of the Exchequer because it is the first gleam we have had in this Budget of anything to assist agriculture. Agriculturists have searched through the Budget to see what was going to be done for them and the small farmer and the small squire, whom I regard as the backbone of the country, found nothing there. We can say now that their interest has not been forgotten. That the Conservative Government is not going to neglect agriculture altogether, and I hope the Chancellor of the Exchequer will stand fast against all political criticism and capital which may be made out of this proposal. If he does so he will be conferring one of the greatest boons conferred upon this industry for a long time.

Major Sir ARCHIBALD SINCLAIR: I beg to move, "That the Chairman do report Progress, and ask leave to sit again."
Mystification has obviously been felt by a number of Members as to what the Chancellor of the Exchequer actually proposes to do. I cannot help thinking that it is very unfortunate that we should be discussing at this hour of the night an Amendment which the Mover attempted to withdraw and which the Chancellor of the Exchequer declares himself unable to accept, and yet it is in some curious and obscure way understood to embody a new policy of the Government which is a very great departure from the policy followed in taxation of this kind since it was first introduced 30 years ago.

Mr. CHURCHILL: indicated dissent.

Sir A. SINCLAIR: We are asked to discuss it without a Committee stage on which we could discuss the details. For example, there is the question which the hon. Member for Huddersfield (Mr. J. Hudson) raised—the question of the definition of the building value of land. I cannot see how that is to be defined. I know a place where the farms have a building value. It depends entirely upon the fact that they may eventually be
used for development based on London 40 miles away. I cannot see how the Chancellor can reach a satisfactory definition of building land. I think we ought to have such a definition before us before we give a. second reading to this Clause. On the more general policy, this means giving £500,000 to landlords of varying types, and different intentions, all over the country. That is not going to help agriculture in any sense. The hon. Member for Romford (Mr. Rhys) stated he was prepared to defend the good landlord. It is invidious for either of us to do that. Is he prepared to back up the bad landlords who are not playing their part in the agricultural industry?

Mr. RHYS: Does the hon. Member mean by the bad landlord the landlord who asks the price for land at which it is valued for Death Duties? I think he is asking a fair price.

Sir A. SINCLAIR: I was referring to the general condition of agriculture at the present time. The hon. Member said many things with which I agree. Amazement has been expressed at the price at which land is being sold at present, a price is being paid far exceeding its economic value in an enormous number of cases, with the result, as the mover and seconder of the Amendment said, it is being bought in a great many cases by occupying owners who are having to pay these excessive prices to avoid eviction. This additional burden is laid upon agricultural land. The value for which these people are paying in many cases is the additional value far and above the agricultural value. They pay for the sporting value and the amenity value in some cases. I admit that argument must not be pressed and that in many cases there is a definite monopoly, but these are the values landlords are receiving at the present time and you cannot divide landlords into two categories, those who have kept their land and those who are selling it. Surely everyone outside the landed interest must see it is grossly unfair when they sell their land as against the man with the small holding. It is unfair that the small holder should have to pay on a full value whereas the landlord should not pay on a full selling value. So long as you have the present system, slow and clumsy as it is at the present time, you are bound inevitably to come up against the demand of the community that the
landlord should pay on the full value. To me it seems disastrous that this paltry gift should be offered to agriculture at the present time. It will pull agriculture right down to the level of party politics. Landlords will be in the forepart of public discussion if the right hon. Gentleman persists in the action which he proposes to take. To my mind it is a gift which the landed interest of this country will live to rue. How anxious the position of agriculture is at the present time. Here we are discussing this matter of a remission when agricultural industry is in such a state that land is being ruined for lack of capital. The Minister of Agriculture in a speech recently referred to the condition of land in Wales and the serious decline in recent years in arable land. This little remission is going to do nothing for agriculture.

Mr. LAMB: On a point of Order. Has the hon. Gentleman the right to say this is a remission of taxation?

Sir A. SINCLAIR: The present state of agriculture is not due to the Chancellor's proposals to increase taxation. Agriculture at the present time is going from bad to worse. It is not going to be cured by such a proposal. You will make no advance or take any step towards improving agricultural industry by singling out the landed interests for exemption from the additional Death Duties which are being put on every form of property at the present time. The case of the occupying owner was suggested. I agree with the case of the man who had to buy his holding since the War. His is a case which demands the sympathy of this Committee and of the whole country. It is a very hard case. I should be glad to be corrected when I say that this will help only to the extent of his actual ownership. It will not help him in the value of his stock and equipment, and after all the tax is required, not only for the landlords of this country, but for occupying owners and tenant farmers. These tenant farmers will get no help. We shall expect the Chancellor of the Exchequer to say whether the tenant farmer will be assisted by this concession. I think not. The situation of the agricultural industry is so serious that, far from assisting the industry, this concession will tend to prejudice it. I would therefore appeal to the right hon. Gentleman to give this
matter further consideration. I think he has been rushed into making this concession by his hon. Friends, and it is unfortunate that we should have to discuss it at this time of the morning without information as to what he means and without definition or any definite Amendment to discuss. Therefore, I think I shall be in order if I move to Report progress, so that we can see what the Chancellor's proposals really are, and give consideration to such a grave departure of policy.

Mr. LLOYD GEORGE: I trust the Chancellor of the Exchequer will, before the Motion is put to the Committee, give us some sort of assurance that we will get his form of Amendment which he proposes to insert so that we can examine it in Committee. It could be done without delaying the Budget at all. For instance, to-morrow he can move it. I do not think it is necessary, according to the Rules of the House, that it should be done to-night, so long as we have the opportunity of seeing it in time. He could put it down as a new Clause. In any case, it would have to be a new Clause. Why should not the Chancellor of the Exchequer give us the opportunity in Committee of examining it? The rules of the House are so rigid on the Report stage that it would be impossible to give proper examination to this proposal. It is a very serious proposal, and though we have had to examine it at a moment's notice he seems to have realised himself the multitude of points it would raise.

The DEPUTY-CHAIRMAN: Is the right hon. Gentleman speaking on the Motion to report Progress?

Mr. LLOYD GEORGE: Yes, I am entirely for reporting Progress. I have just put to the Chancellor the desirability of moving to report Progress now in order that he should give notice of the Amendment to-morrow or the day after. It is quite impossible to rush the Procedure on a subject of this kind, and the Committee cannot let it go without discussing it fully. There would be a motion down and we would be able to discuss it in Committee. He will not lose time by it. If he gave us the opportunity of discussing a definite proposal, it would be far better because everything or at any rate a good deal depends upon the definition the Chancellor of the Exchequer gives of his
proposal. I therefore, urge him on this Motion to report Progress to give us an undertaking that before the Budget leaves the Committee stage he will let us know what it is.

Mr. CHURCHILL: I think there is a good deal to be said for what the right Son. Gentleman has said since I have been asked whether it is possible to make some concession in the case of agricultural land. I have indicated an amendment to be put down in time for the Report stage, and Amendment which exempts from the increased duties agricultural land and involves a diminution of £500,000 in revenue. The right hon. Gentleman vies with speakers above the Gangway in trying to represent some departure from tradition. It is a most absurd and ridiculous exaggeration. The right hon. Gentleman expresses the hope that I should be prepared to explain the Amendment. I shall be prepared to cite it on the proper occasion. I do not propose to do so tonight. The discussion will come much better when the actual text of the new clause has been placed upon the Paper.

Mr. RAMSAY MacDONALD: Is there to be a new Clause?

Mr. CHURCHILL: Yes, and I shall endeavour to put it on the Paper as soon as possible. I quite agree that the Committee should have ample opportunity of studying it and decide upon it with a precise knowledge. At the present moment I am not asking the Committee to come to any decision, and have merely stated that at a later date we shall have the proposal. There is no reason why we should report Progress now, and I cannot accept such a Motion.

Mr. MacDONALD: We do not understand exactly how the business stands. Is the Amendment to be put down for the Report stage or to-morrow? I am asking for it to be put down on the Report stage and not to-morrow. The Chancellor has made the matter worse by confessing that for the last three or four days not only he had made up his mind that this alteration should take place but that the Committee of Ministers exploited it, decided in favour of it, and that the Cabinet had also decided on it. In any event, whatever may be the merits or demerits of his conception, he must treat the House of Commons fairly, and I do not think it
ought to be allowed at this unreported stage. If the Chancellor of the Exchequer does mean that, I think certainly those for whom I speak will have to support the Motion to report Progress. It is a most improper procedure. If I am speaking under a misapprehension, and the Chancellor really does mean to put it down to-morrow, then, so far as I am concerned—

Mr. CHURCHILL: I am quite ready to put it down in the Committee stage of the Bill among the New Clauses. It has had a certain amount of discussion to-day and we are anxious to get this stage completed by Wednesday night. I take notice what my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George) has said, that such a. procedure on our part will not necessarily delay the matter. During the course of to-morrow I will put a Clause down, so that it can be discussed among the New Clauses on Wednesday. I shall be quite prepared to put this Clause on the Paper in time for it to be discussed with the New Clauses at this stage of the Bill. Is that what the right hon. Gentleman asks?

Mr. LLOYD GEORGE: I understand the right hon. Gentleman now is prepared to put a Clause down in time to enable us to discuss it on the Committee stage?

Mr. CHURCHILL: Yes.

Mr. LLOYD GEORGE: I am sure my hon. Friend will withdraw the Motion to report Progress under the circumstances. It is far better, I agree, that a discussion should take place when we can see the actual proposal before the Committee.

2.0 A. M.

Captain BENN: May I ask exactly what the procedure is? When the new Clauses are taken, so far as I am aware, there is only one Government Clause. Does the right hon. Gentleman propose to put it down this morning and take it this afternoon? It will be rather inconvenient, whether taken in daylight or in the small hours of the morning.

Mr. CHURCHILL: I will undertake that this New Clause shall be put down in time for discussion with the others.

Sir A. SINCLAIR: I beg to ask leave to withdraw the Motion to report Progress.

Motion, by leave, withdrawn.

Question again proposed, "That those words be there inserted."

Sir R. SANDERS: I beg to ask leave to withdraw my Amendment.

HON. MEMBERS: No!

Amendment negatived.

Major RUGGLES-BR1SE: I do not propose to move my Amendment—in page 13, line 14, to leave out from the word "be" to the end of line 10, and to insert instead thereof the words
the scale set out in Section seventeen of the Finance Act, 1894, this Section shall be deemed to be incorporated hereby in this Act.
The Amendment that stands in my name is very largely met by the concession which the Chancellor of the Exchequer has just announced to the House. The purpose of this Amendment was in order to exclude agricultural property, that agricultural property should not be aggregated with other property whether reality or personality for the purpose of arriving at the particular value of an estate. The arguments which have been given from many questions of the House in favour of a previous Amendment moved by the right hon. Member for Wells really meet the case and I do not propose to say anything further on this particular Amendment except to say that the concession which has been made by the Chancellor of the Exchequer does go a very long way to meet us.

Clause ordered to stand part of the Bill.

Clauses 20 (Determination for purposes of succession duty of date on which succession arises), 21 (Liability of Dominion Governments to taxation in respect of trading operations), 22 (Further relief from tax in respect of income of High Commissioners, Agents-General, and their staffs), 23 (Continuance during current financial year of Section 68 of 10 and 11 Geo. 5. c. 18), and 24 (Construction, short title, application and repeal), ordered to stand part of the Bill.

The CHAIRMAN: The first of the New Clauses on the Paper—(Customs duty on lace)—is not in Order, because the Resolution has not been reported to the House.

Ordered, "That the Chairman do report Progress, and ask leave to sit again."—[Mr. Churchill.]

Committee report Progress; to sit again. To-morrow.

Orders of the Day — WAYS AND MEANS.

[11th JUNE.]

Resolution reported

LACE DUTY.

"That, during a period of five years beginning on the first day of July, nineteen hundred and twenty-five, there shall, on the importation into Great Britain or Northern Ireland of any of the following goods, that is to say—
Lace of cotton, silk, or other fibre, whether made by hand or by machine;
Products of the machine known as the Leaver's lace machine, the lace curtain machine, the lace net machine, or the circular lace machine;
Embroidery manufactured on net or on any fabric which, or the main part of which, is eliminated before the article reaches its final stage;
whether the goods form part of or are attached to garments or other articles or not, be charged (in addition to any customs duty payable in respect of the goods as being or containing or being made wholly or in part of silk or artificial silk) a duty of customs equal to thirty-three and one-third per cent. of the value of the goods:"

Resolution read a Second time.

Mr. RAMSAY MacDONALD: I have put down an Amendment as the result of a conversational discussion in the Committee stage. I understand that the President of the Board of Trade considers the Amendment he has down in his name meets the point more adequately and equitably. In that event, I think it will save time if we only had one discussion, and I will not move.

The PRESIDENT of the BOARD OF TRADE (Sir Philip Cunliffe-Lister): I beg to move, in line 10, to leave out from the word "charged" to the word "a" in line 11.
I am much obliged to my right hon. Friends. I think the Amendment I put down after the discussion we had in the Committee stage more conveniently meets the case. I gave an undertaking to the Committee that it was not our intention to charge a Lace Duty in any case of more than 33⅓ per cent. recommended by the Committee, and the proviso, which I have put on the Paper, to be inserted at the end gives effect to that. What will happen under this proviso? Put into simple language, it will be as follows. If an article is made up it will pay the Lace Duty only on
the lace, and the appropriate Silk Duty on the balance. That is to say—assume a made-up article of which the total value is £100, the lace value in that being £10. The Lace Duty will be charged on the £10, which is the lace value, and the Silk Duty will be charged on the balance of £90, which is the value apart from the lace. In that way we shall charge exactly 334 per cent. on the lace article and the appropriate amount will be charged only on the balance distinctive from the lace. If the article is an article simply of lace and not a made-up article, we shall charge either the Lace Duty or the Silk Duty, whichever is the higher—that is to say—in no case will it bear a greater or less Duty than the 334 per cent. It is necessary to put in that way because I believe there are actually some cases where the Silk Duty might work out as a larger Duty than 334 per cent. In that case there would be no Lace Duty charged. Therefore, we are charging either on lace, as lace where it is not made up, either the Lace Duty of 334 per cent., or the Silk Duty, whichever is the higher. I think these two provisos completely give effect to the undertaking that I gave to the Committee, that it was not our intention to charge a duty as such to a greater extent than the 33⅓ per cent.

Captain BENN: The first observation I should like to make is that this Amendment as moved is textually the same Amendment that I put down two nights ago, and at which the right hon. Gentleman scoffed, saying it was absolutely impossible. He even hinted it was moved for obstructive purposes. Now he comes along, and sees that the point is a real one, and moves an Amendment textually the same as the one I put on the Paper. If he desires it, I shall be glad to have his explanation, but he knows quite well it is exactly the same Amendment that I put down.

Sir P. CUNLIFFE-LISTER: Then we are all satisfied.

Captain BENN: I am glad the right hon. Gentleman is satisfied. I wish he had shown his satisfaction, and saved the time of the Committee by accepting my Amendment. I am not quite sure that the proviso really does exactly as intended, and I have handed in at the Table earlier in the day
a series of Amendments to the proviso which would have the following effect. Very briefly the point was this. The President of the Board of Trade has pledged himself not to impose a double duty; that is to say, 33⅓ per cent. shall be the only duty imposed in respect of any article of which lace is a part. But his proviso only says there shall be no double duty in respect of the Lace Duty and the Silk Duty. It is quite possible there may be other Customs duties imposed which might involve a double duty. For example, the result of giving the Lace Duty has been to move the makers of underclothing and so on to come forward and possibly to ask for and perhaps succeed in getting a duty on their products. If the President of the Board of Trade agrees that a double duty is undesirable, he will agree that a double duty under any Act of Parliament is undesirable, and not only in respect of Lace and Silk Duty. In the Safeguarding of Industries Act, Part I, there is a form of words which says that the 33⅓ per cent. in that part shall not be in addition to any other duty chargeable, and I think some such form of words should be introduced in reference to this Lace Duty. The effect of my Amendment would make the proviso read:
Provided that, in the case of any article which is chargeable both with the. lace and embroidery duty under this Resolution and with any other customs duty, the value of the lace in. the article shall he excluded in computing the value of the article for the purpose of any other duty, and in any other case any other duty shall only be charged in so far as it exceeds the lace and embroidery duty.
I know it is not the right hon. Gentleman's desire to impose a double duty, whether in respect of silk or any other duty, on to the Lace Duty. If he could accept some words to this effect he would give effect to the promise which we all know it is his intention to carry out.

Sir P. CUNLIFFE-LISTER: To satisfy my hon. and gallant Friend, I really thought I had done exactly what he hoped for. Now he is asking for something quite different, and something which I am sure he will appreciate no reasonable man could be expected to give. I am dealing simply with the duties now before Parliament—the two duties, silk and lace. What he is now asking is that here and now the House should commit itself in an Act of Parliament to saying that at no
future time, whatever duties may in any circumstances come before the House, there shall never be two duties. In the first place, it is unnecessary to do that, because any new duty that comes before the House will come in the regular financial way, and it will then be within the full competence of the House to pronounce upon its merits. In the second place, I think it would be really futile to insert such a Clause, because it could not bind a future House if the House chose on a future date to vary the provisions here inserted. For reasons of convention and convenience I propose to ask the House to confine itself to dealing with the only duties which are now before it, namely the Silk Duty and the Lace Duty. I have completely fulfilled the undertaking I gave with regard to this, and I beg the House not to go into hypothetical future questions.

Mr. HARRIS: This is by no means a hypothetical point. I would like to show that it is a very practical one. There are two taxes we are trying to cover—lace and silk. There is a possibility that fabric gloves may be taxed. They are commonly made of artificial silk and very often they have lace in them There has been a fashion for what is called fancy gloves that are embroidered, and thus you would have the fantastic position of an article coming within three taxations and you might find yourselves having to propose fresh legislation to deal with this particular point. Surely it is well, now that the Government has embarked on the Safeguarding of Industries Act, to make the position clear, that whatever is done there will not be an article taxed under more than one head.

Amendment agreed to.

Sir P. CUNLIFFE-LISTER: I beg to move, in line 12, at the end, to add the words
Provided that, in the case of any article which is chargeable both with the lace and embroidery duty under this Resolution and with the customs duty payable in respect of the goods as being or containing or being made wholly or in part of silk or artificial silk, if the article is a made-up article, the value of the lace in the article shall be excluded in computing the value of the article for the purpose of the silk duty, and in any other case the silk duty shall only be charged in so far as it exceeds the lace and embroidery duty.

Captain BENN: Are you proposing, Mr. Speaker, to put the Amendment which I handed in at the Table earlier in the day?

Mr. SPEAKER: I think the hon. and gallant Member took that point just now.

Captain BENN: I was asking you to put the first of my small Amendments which has a definite relation to this one.

Mr. SPEAKER: I thought these four Amendments were all part of one matter.

Captain BENN: They all hang together in reference to the Amendment you have just read out.

Mr. SPEAKER: I feel a little doubtful whether I ought to allow words to be put in which would appear to bind a future House of Commons. The difficulty is that they have no such intention. They would not have any legislative effect if these words were put in. If the hon. Member likes, I will take his first Amendment.

Captain BENN: There is a definite precedent where the same case arose on Part I of the Safeguarding of Industries Act, where words occur which say that the duties chargeable there shall not be in addition to other duties.

Sir P. CUNLIFFE-LISTER: That was-a wholly different point. There in effect the Safeguarding of Industries Act was the taxing authority, and Orders were subsequently made which merely required a Resolution of the House. Here you have an entirely distinct point where a duty is imposed by a Clause in an Act of Parliament. I submit with respect that it would be nugatory to insert any such provision in these circumstances.

Mr. SPEAKER: It seems to me it would not have any effect. I do not know whether that is a ground for ruling it out of order.

Captain BENN: It is a matter of some importance to those engaged in the industry, and I beg to move, as an Amendment to the proposed Amendment, in line 2, to leave out the word "the," and to insert instead thereof the words "any other."

Question put, "That the word 'the' stand part of the proposed Amendment."

The House divided: Ayes, 178; Noes, 51.

Division No. 156.]
AYES.
[11.40 p.m.


Acland-Troyte, Lieut.-Colonel
Beamish, Captain T. P. H.
Brown, Brig.-Gen. H. C. (Berks, Newb'y)


Ainsworth, Major Charles
Betterton, Henry B.
Buckingham, Sir H.


Albery, Irving James
Birchall, Major J. Dearman
Bull, Rt. Hon. Sir William James


Alexander, Sir Wm. (Glasgow, Cent'l)
Blades, Sir George Rowland
Burman, J. B.


Allen, J. Sandeman (L'pool, W. Derby)
Boothby, R. J. G.
Butler, Sir Geoffrey


Amery, Rt. Hon. Leopold C. M. S.
Bourne, Captain Robert Croft
Cadogan, Major Hon. Edward


Applin, Colonel R. V. K.
Bowater, Sir T. Vansittart
Campbell, E. T.


Ashley, Lt.-Col. Rt. Hon. Wilfrid W.
Bowyer, Captain G. E. W.
Cayzer, Sir C. (Chester, City)


Ashmead-Bartlett, E.
Boyd-Carpenter, Major A.
Cayzer, Maj. Sir Herbt. R. (Prtsmth, S.)


Astor, Maj. Hon. John J. (Kent, Dover)
Brassey, Sir Leonard
Cecil, Rt. Hon. Sir Evelyn (Aston)


Baldwin, Rt. Hon. Stanley
Briggs, J. Harold
Chadwick, Sir Robert Burton


Balfour, George (Hampstead)
Briscoe, Richard George
Christie, J. A.


Balniel, Lord
Brocklebank, C. E. R.
Churchill, Rt. Hon. Winston Spencer


Barclay-Harvey, C. M.
Brooke, Brigadier-General C. R. I.
Churchman, Sir Arthur C.


Barnett, Major Sir Richard
Broun-Lindsay, Major H.
Clayton, G. C.


Barnston, Major Sir Harry
Brown, Maj. D. C. (N'th'l'd., Hexham)
Cobb, Sir Cyril


Cochrane, Commander Hon. A. D.
Henniker-Hughan, Vice-Adm. Sir A.
Pielou, D. P.


Cohen, Major J. Brunel
Herbert, Dennis (Hertford, Watford)
Power, Sir John Cecil


Cooper, A. Duff
Herbert, S. (York, N. R., Scar. & Wh'by)
Pownall, Lieut.-Colonel Assheton


Couper, J. B.
Hilton, Cecil
Preston, William


Courtauld, Major J. S.
Hogg, Rt. Hon. Sir D. (St. Marylebone)
Price, Major C. W. M.


Croft, Brigadier-General Sir H.
Holbrook, Sir Arthur Richard
Radford, E. A.


Crookshank, Col. C. de W. (Berwick)
Holland, Sir Arthur
Ramsden, E.


Crookshank, Cpt. H. (Lindsey, Gainsbro)
Holt, Capt. H. P.
Reid, D. D. (County Down)


Curzon, Captain Viscount
Hope, Capt. A. O. J. (Warw'k, Nun.)
Remer, J. R.


Dalkeith, Earl of
Hopkins, J. W. W.
Rhys, Hon. C. A. U.


Davidson, J. (Hertf'd, Hemel Hempst'd)
Horne, Rt. Hon. Sir Robert S.
Rice, Sir Frederick


Davidson, Major-General Sir John H.
Howard, Captain Hon. Donald
Robinson, Sir T. (Lanc., Stretford)


Davies, A. V. (Lancaster, Royton)
Hudson, Capt. A. U. M. (Hackney, N.)
Ruggles-Brise, Major E. A.


Davies, Maj. Geo. F. (Somerset, Yeovil)
Hudson, R. S. (Cumberl'nd, Whiteh'n)
Russell, Alexander West (Tynemouth)


Davies, Sir Thomas (Cirencester)
Hunter-Weston, Lt.-Gen. Sir Aylmer
Rye, F. G.


Davison, Sir W. H. (Kensington, S.)
Huntingfield, Lord
Salmon, Major I.


Dixey, A. C.
Hurd, Percy A.
Samuel, A. M. (Surrey, Farnham)


Doyle, Sir N. Grattan
Inskip, Sir Thomas Walker H.
Samuel, Samuel (W'dsworth, Putney)


Drewe, C.
Jackson, Lieut.-Colonel Hon. F. S.
Sandeman, A. Stewart


Eden, Captain Anthony
Jackson, Sir H. (Wandsworth, Cen'l)
Sanders, Sir Robert A.


Edmondson, Major A. J.
Jacob, A. E.
Sassoon, Sir Philip Albert Gustave D.


Elliot, Captain Walter E.
Jephcott, A. R.
Shaw, R. G. (Yorks, W.R., Sowerby)


England, Colonel A.
Kidd, J. (Linlithgow)
Shaw, Capt. W. W. (Wilts, Westb'y)


Erskine, Lord (Somerset, Weston-s-M.)
Kinloch-Cooke, Sir Clement
Sheffield, Sir Berkeley


Evans, Captain A. (Cardiff, South)
Lamb, J. Q.
Shepperson, E. W.


Everard, W. Lindsay
Lane-Fox, Lieut.-Col. George R.
Skelton, A. N.


Fairfax, Captain J. G.
Leigh, Sir John (Clapham)
Slaney, Major P. Kenyon


Falle, Sir Bertram G.
Lister, Cunliffe-, Rt. Hon. Sir Philip
Smith, R.W. (Aberd'n & Kinc'dine, C.)


Fanshawe, Commander G. D.
Little, Dr. E. Graham
Smith-Carington, Neville W.


Fermoy, Lord
Locker-Lampson, Com. O. (Handsw'th)
Smithers, Waldron


Fielden, E. B.
Loder, J. de V.
Somerville, A. A. (Windsor)


Finburgh, S.
Looker, Herbert William
Sprot, Sir Alexander


Fleming, D. P.
Luce, Major-Gen. Sir Richard Harman
Stanley, Lord (Fylde)


Ford, P. J.
Lumley, L. R.
Stanley, Col. Hon. G. F. (Will'sden, E.)


Forestier-Walker, Sir L.
Macdonald, Capt. P. D. (I. of W.)
Steel, Major Samuel Strang


Forrest, W.
Macdonald, R. (Glasgow, Cathcart)
Strickland, Sir Gerald


Foxcroft, Captain C. T.
McDonnell, Colonel Hon. Angus
Stuart, Hon. J. (Moray and Nairn)


Fraser, Captain Ian
Macintyre, Ian
Sueter, Rear-Admiral Murray Fraser


Fremantle, Lieut.-Colonel Francis E.
McLean, Major A.
Sugden, Sir Wilfrid


Gadie, Lieut. Col. Anthony
MacRobert, Alexander M.
Tasker, Major R. Inigo


Ganzoni, Sir John
Manningham-Buller, Sir Mervyn
Templeton, W. P.


Gates, Percy
Margesson, Captain D.
Thompson, Luke (Sunderland)


Gault, Lieut.-Col. Andrew Hamilton
Marriott, Sir J. A. R.
Thomson, F. C. (Aberdeen, South)


Gee, Captain R.
Mason, Lieut.-Col. Glyn K.
Thomson, Sir W. Mitchell-(Croydon, S.)


Gibbs, Col. Rt. Hon. George Abraham
Milne, J. S. Wardlaw-
Tinne, J. A.


Gilmour, Lt.-Col. Rt. Hon. Sir John
Mitchell, S. (Lanark, Lanark)
Tichfield, Major the Marquess of


Glyn, Major R. G. C.
Mitchell, W. Foot (Saffron Walden)
Tryon, Rt. Hon. George Clement


Goff, Sir Park
Monsell, Eyres, Com. Rt. Hon. B. M.
Wallace, Captain D. E.


Grant, J. A.
Moore-Brabazon, Lieut.-Col. J. T. C.
Ward, Lt.-Col. A.L.(Kingston-on-Hull)


Greene, W. P. Crawford
Moreing, Captain A. H.
Warner, Brigadier-General W. W.


Gretton, Colonel John
Morrison, H. (Wilts, Salisbury)
Warrender, Sir Victor


Grotrian, H. Brent
Morrison-Bell, Sir Arthur Clive
Waterhouse, Captain Charles


Guest, Capt. Rt. Hon. F. E. (Bristol, N.)
Nall, Lieut.-Colonel Sir Joseph
Watson, Sir F. (Pudsey and Otley)


Guinness Rt. Hon. Walter E.
Nelson, Sir Frank
Wells, S. R.


Hall, Lieut.-Col. Sir F. (Dulwich)
Neville, R. J.
Wheler, Major Sir Granville C. H.


Hall, Capt. W. D'A. (Brecon & Rad.)
Newman, Sir R. H. S. D. L. (Exeter)
Williams, Com. C. (Devon, Torquay)


Hanbury, C.
Nield, Rt. Hon. Sir Herbert
Williams, Herbert G. (Reading)


Harland, A.
Nuttall, Ellis
Wilson, Sir C. H. (Leeds, Central)


Harrison, G. J. C.
O'Connor, T. J. (Bedford, Luton)
Winterton, Rt. Hon. Earl


Hartington, Marquess of
O'Neill, Major Rt. Hon. Hugh
Wise, Sir Fredric


Harvey, G. (Lambeth, Kennington)
Oakley, T.
Wood, B. C. (Somerset, Bridgwater)


Harvey, Majors. E. (Devon, Totnes)
Ormsby-Gore, Hon. William
Wood, E. (Chesfr, Stalyb'dge & Hyde)


Haslam, Henry C.
Pennefather, Sir John
Wood, Sir S. Hill- (High Peak)


Hawke, John Anthony
Percy, Lord Eustace (Hastings)
Woodcock, Colonel H. C.


Henderson. Capt. R. R. (Oxf'd, Henley)
Perkins, Colonel E. K.



Henn, Sir Sydney H.
Peto, G. (Somerset, Frome)
TELLERS FOR THE AYES.—


Hennessy, Major J. R. G.
Philipson, Mabel
Captain Hacking and Major Cope.


NOES.


Adamson, Rt. Hon. W. (File, West)
Collins, Sir Godfrey (Greenock)
Gillett, George M.


Adamson, W. M. (Staff., Cannock)
Compton, Joseph
Graham, D. M. (Lanark, Hamilton)


Alexander, A. V. (Sheffield, Hillsbro')
Connolly, M.
Greenall. T.


Ammon, Charles George
Cowan, D. M. (Scottish Universities)
Greenwood, A. (Nelson and Colne)


Barnes, A.
Crawfurd, H. E.
Grenfell, D. R. (Glamorgan)


Barr, J.
Dalton, Hugh
Groves, T.


Batey, Joseph
Davies, Rhys John (Westhoughton)
Grundy, T. W.


Beckett, John (Gateshead)
Day, Colonel Harry
Guest, J. (York, Hemsworth)


Benn, Captain Wedgwood (Leith)
Duncan, C.
Guest, Dr. L. Haden (Southwark, N.)


Bowerman, Rt. Hon. Charles W.
Dunnico, H.
Hall, F. (York W. R., Normanton)


Broad, F. A.
Fenby, T. D.
Hall. G. H. (Merthyr Tydvil)


Bromley, J.
Garro-Jones, Captain G. M.
Hamilton, Sir R. (Orkney & Shetland)


Clowes, S.
George, Rt. Hon. David Lloyd
Hardie, George D.


Cluse, W. S.
Gibbins, Joseph
Harris, Percy A.




Hartshorn, Rt. Hon. Vernon
Murnin, H.
Thomson, Trevelyan (Middlesbro, W.)


Hayday, Arthur
Naylor, T. E.
Thorne, G. R. (Wolverhampton, E.)


Henderson, Rt. Hon. A. (Burnley)
Palin, John Henry
Thurtle, E.


Henderson, T. (Glasgow)
Paling, W.
Tinker, John Joseph


Hirst, G. H.
Pethick-Lawrence, F. W.
Trevelyan, Rt. Hon. C. P.


Hirst, W. (Bradford, South)
Potts, John S.
Varley, Frank B.


Hudson, J. H. (Huddersfield)
Rees, Sir Beddoe
Viant, S. P.


Hutchison, Sir Robert (Montrose)
Richardson, R. (Houghton-le-Spring)
Warne, G. H.


Jenkins, W. (Glamorgan, Neath)
Riley, Ben
Watson, W. M (Dunfermline)


John, William (Rhondda, West)
Ritson, J.
Watts-Morgan, Lt.-Col. O. (Rhondda)


Johnston, Thomas (Dundee)
Robertson, J. (Lanark, Bothwell)
Welsh, J. C.


Jones, Henry Haydn (Merioneth)
Robinson, W. C. (York, W. R., Elland)
Westwood, J.


Jones, J. J. (West Ham, Silvertown)
Rose, Frank H.
Wheatley, Rt. Hon. J.


Jones, Morgan (Caerphilly)
Salter, Dr. Alfred
Whiteley, W.


Kelly W. T.
Shiels, Dr. Drummond
Williams, C. P. (Denbigh, Wrexham)


Kennedy, T.
Short, Alfred (Wednesbury)
Williams, David (Swansea, East)


Kirkwood, D.
Simon, Rt. Hon. Sir John
Williams, Dr. J. H. (Llanelly)


Lansbury, George
Sinclair, Major Sir A. (Caithness)
Williams, T. (York. Don Valley)


Lawson, John James
Sitch, Charles H.
Wilson, C. H. (Sheffield, Attercliffe)


Lunn, William
Slesser, Sir Henry H.
Wilson, R. J. (Jarrow)


MacDonald, Rt. Hon. J. R. (Aberavon)
Smith, Ben (Bermondsey, Rotherhithe)
Windsor, Walter


Mackinder, W.
Snell, Harry
Wright, W.


MacLaren, Andrew
Snowden, Rt. Hon. Philip
Young, Robert (Lancaster, Newton)


Maclean, Nell (Glasgow, Govan)
Stamford, T. W.



Maxton, James
Stephen, Campbell
TELLERS FOR THE NOES.—


Montague, Frederick
Sutton, J. E.
Mr. Parkinson and Mr. Charles


Morris, R. H.
Thomas, Sir Robert John (Anglesey)
Edwards.


Question put, and agreed to.

Division No. 157.]
AYES.
[2.22 a.m.


Acland-Troyte, Lieut.-Colonel
Forestier-Walker, Sir L.
Pennefather, Sir John


Albery, Irving James
Foxcroft, Captain C. T.
Percy, Lord Eustace (Hastings)


Alexander, Sir Wm. (Glasgow, Cent'l)
Gadie, Lieut.-Col. Anthony
Peto, G. (Somerset, Frome)


Allen, J. Sandeman (L'pool, W. Derby)
Ganzoni, Sir John
Pleiou, D. P


Amery, Rt. Hon. Leopold C. M. S.
Gates, Percy
Preston, William


Applin, Colonel R. V. K.
Gibbs. Col. Rt. Hon. George Abraham
Price, Major C. W. M.


Ashmead-Bartlett, E.
Gilmour, Lt.-Col. Rt. Hon. Sir John
Radford, E. A.


Astor, Maj. Hn. John J. (Kent, Dover)
Goff, Sir Park
Ramsden, E.


Baldwin, Rt. Hon. Stanley
Grant, J. A.
Reid, Capt. A. S. C. (Warrington)


Balniel, Lord
Greene, W. P. Crawford
Remer, J. R.


Barclay-Harvey, C. M.
Hacking, Captain Douglas H.
Ruggles-Brise, Major E. A.


Barnett, Major Sir Richard
Hall, Capt. W. D'A. (Brecon & Rad.)
Russell, Alexander West (Tynemouth)


Beamish, Captain T. P. H.
Hanbury, C.
Rye, F. G.


Betterton, Henry B.
Harrison, G. J. C.
Salmon, Major I.


Boothby, R. J. G.
Hartington, Marquess of
Samuel, A. M. (Surrey, Farnham)


Bourne, Captain Robert Croft
Harvey, G. (Lambeth, Kennington)
Samuel, Samuel (W'dsworth, Putney)


Bowater, Sir T. Vansittart
Harvey, Major S. E. (Devon, Totnes)
Sandeman, A. Stewart


Bowyer, Captain G. E. W.
Hawke, John Anthony
Sanders, Sir Robert A.


Brassey, Sir Leonard
Henderson, Capt. R. R. (Oxf'd, Henley)
Sassoon, Sir Philip Albert Gustave D.


Briggs, J. Harold
Henniker-Hughan, Vice-Adm. Sir A.
Shaw, Lt.-Col. A. D. Mcl. (Renfrew, W)


Briscoe, Richard George
Herbert, Dennis (Hertford, Watford)
Shaw, R. G. (Yorks, W. R., Sowerby)


Brittain, Sir Harry
Herbert, S. (York, N. R., Scar. & Wh'by)
Shaw, Capt. W. W. (Wilts, Westb'y)


Brocklebank, C. E. R.
Hilton, Cecil
Shepperson, E. W.


Brooke, Brigadier-General C. R. I.
Hogg, Rt. Hon. Sir D. (St. Marylebone)
Skelton, A. N.


Broun-Lindsay, Major H.
Holbrook, Sir Arthur Richard
Slaney, Major P. Kenyon


Brown, Brig.-Gen. H. C. (Berks, Newb'y)
Holland, Sir Arthur
Slesser, Sir Henry H.


Burman, J. B.
Holt. Capt. H. P.
Smith, R.W. (Aberd'n & Kinc'dine, C.)


Butler, Sir Geoffrey
Hope, Capt. A. O. J. (Warw'k, Nun.)
Smith-Carington, Neville W.


Campbell, E. T.
Hopkins, J. W. W.
Smithers, Waldron


Chadwick, Sir Robert Burton
Howard, Captain Hon. Donald
Sprot, Sir Alexander


Christie, J. A.
Hudson, Capt. A. U. M. (Hackney, N.)
Stanley, Lord (Fylde)


Churchill, Rt. Hon. Winston Spencer
Hudson, R. S. (Cumberland, Whiteh'n)
Stanley, Col. Hon. G. F. (Will'sden, E.)


Churchman, Sir Arthur C.
Inskip, Sir Thomas Walker H.
Sugden, Sir Wilfrid


Clayton, G. C.
Jacob, A. E.
Tasker, Major R. Inigo


Cobb, Sir Cyril
Jephcott, A. R.
Templeton, W. P.


Cochrane, Commander Hon. A. D.
Kidd, J. (Linlithgow)
Thompson, Luke (Sunderland)


Cooper, A. Duff
Lamb, J. Q.
Thomson, F. C. (Aberdeen, South)


Cope. Major William
Lane-Fox, Lieut.-Col. George R.
Thomson, Sir W. Mitchell-(Croydon, S.)


Courtauld, Major J. S.
Lister, Cunliffe-, Rt. Hon. Sir Philip
Tinne. J. A.


Courthope, Lieut.-Col. Sir George L.
Little, Dr. E. Graham
Tichfield, Major the Marquess of


Croft, Brigadier-General Sir H.
Loder, Captain J. de V.
Tryon, Rt. Hon. George Clement


Crookshank, Col. C. de W. (Berwick)
Lumley, L. R.
Ward, Lt.-Col. A. L. (Kingston-on-Hull)


Crookshank, Cpt. H. (Lindsey, Gainsbro)
Macdonald, Capt. P. D. (I. of W.)
Warner, Brigadier-General W. W.


Curzon, Captain Viscount
Macdonald, R. (Glasgow, Cathcart)
Warrender, Sir Victor


Dalkeith, Earl of
McDonnell, Colonel Hon. Angus
Waterhouse, Captain Charles


Davidson, J. (Hertl'd, Hemel Hempst'd)
Macintyre, Ian
Watson, Sir F. (Pudsey and Otley)


Davies, A. V. (Lancaster, Royton)
McLean, Major A.
Wells, S. R.


Davies, Maj. Geo. F. (Somerset, Yeovil)
MacRobert, Alexander M.
Wheler, Major Sir Granville C. H.


Davies, Sir Thomas (Cirencester)
Manningham-Buller, Sir Mervyn
Williams, Com. C. (Devon, Torquay)


Dixey, A. C.
Margesson, Captain D.
Williams, Herbert G. (Reading)


Drewe, C.
Mason, Lieut.-Col. Glyn K.
Wilson, Sir C. H. (Leeds, Central)


Eden, Captain Anthony
Mitchell, S. (Lanark, Lanark)
Winterton, Rt. Hon. Earl


Edmondson, Major A. J.
Mitchell, W. Foot (Saffron Walden)
Wise, Sir Fredric


Elliot, Captain Walter E.
Monsell, Eyres, Com. Rt. Hon. B. M.
Wood, B. C. (Somerset, Bridgwater)


Evans, Captain A. (Cardiff, South)
Moore-Brabazon, Lt.-Col. J. T. C.
Wood, E. (Chest'r, Stalyb'dge & Hyde)


Everard, W. Lindsay
Morrison-Bell, Sir Arthur Clive
Woodcock, Colonel H. C.


Fairfax, Captain J. G.
Nall, Lieut.-Colonel Sir Joseph



Fanshawe, Commander G. D.
Nelson, Sir Frank
TELLERS FOR THE AYES.—


Fermoy, Lord
Nuttall, Ellis
Sir Harry Barnston and Major


Fleming, D. P.
O'Connor, T. J. (Bedford, Luton)
Hennessy.


Ford, P. J.
Oakley, T.





NOES.


Adamson, Rt. Hon. W. (Fife, West)
Hartshorn, Rt. Hon. Vernon
Potts, John S.


Adamson, W. M. (Staff., Cannock)
Henderson, Right Hon. A. (Burnley)
Robinson, W. C. (Yorks, W. R., Elland)


Ammon, Charles George
Henderson, T. (Glasgow)
Smith, Ben (Bermondsey, Rotherhithe)


Barr, J.
Hirst, G. H.
Sutton, J. E.


Benn, Captain Wedgwood (Leith)
Hirst, W. (Bradford, South)
Thomas. Sir Robert John (Anglesey)


Cowan, D. M. (Scottish Universities)
Hudson, J. H. (Huddersfield)
Thomson, Trevelyan (Middlesbro. W.)


Crawfurd, H. E.
John, William (Rhondda, West)
Tinker, John Joseph


Dalton, Hugh
Jones, Henry Haydn (Merioneth)
Warne, G. H.


Day, Colonel Harry
Jones, J. J. (West Ham, Silvertown)
Watson, W. M. (Dunfermilne)


Duncan, C.
Jones, Morgan (Caerphilly)
Watts-Morgan, Lt.-Col. D. (Rhondda)


Edwards, C. (Monmouth, Bedwellty)
Kelly, W. T.
Welsh. J. C.


Fenby, T. D.
Lawson, John James
Westwood, J.


Garro-Jones, Captain G. M.
MacDonald, Rt. Hon. J. R.(Aberavon)
Williams, C. P. (Denbigh, Wrexham)


Gillett, George M.
Maclean, Nell (Glasgow, Govan)
Windsor, Walter


Graham, D. M. (Lanark, Hamilton)
Morris, R. H.



Grundy, T. W.
Murnin, H.
TELLERS FOR THE NOES.—


Hall, F. (York, W. R., Normanton)
Parkinson, John Allen (Wigan)
Sir Godfrey Collins and Sir Robert


Hamilton, Sir R. (Orkney & Shetland)
Pethick-Lawrence, F. W.
Hutchison.


Harris, Percy A.

Question, "That those words be there added," put, and agreed to.

Motion made, and Question proposed, "That this House doth agree with the Committee in the Resolution, as amended."

Captain BENN: It is quite impossible to let this amended Resolution pass without at least a formal protest from the Members on this side of the House. The one or two points I intend to make will show that a key position is involved, and whatever the time of night we intend to make our protest. This is much more than merely a Resolution imposing a new duty on lace. In order to prove that I must recapitulate very briefly the history of this matter. At the General Election of 1923 the Prime Minister tried to get a majority for a tariff and he failed. At the General Election of 1924 the Prime Minister promised not to introduce a tariff under any conditions, and he succeeded. When this House met he proposed to introduce it by a Bill, but he dropped it because it would take too much time, and instead of the Bill he produced a White Paper in the same terms as would have been provided if the Bill had been brought forward. He laid it down in the White Paper that we should appoint the Committees ourselves instead of statutory Committees. No duties were to be granted unless certain conditions were fulfilled. In the Debate we had on the White Paper the President of the Board of Trade said that these conditions would have to be fulfilled, and then he said the Committee would inquire into the lace industry. It is quite true there was an earlier inquiry, but that is not the point. They were to inquire into the lace trade under the conditions of the White Paper. Hon. Members make a great mistake when they think that by mere fatigue or by shouting they will stop us. The short point is that we had the pledge of the Prime Minister that these conditions would be fulfilled, and that if they were not ful-

filled there would be no duty. The Committee reported that the conditions were not fulfilled, and having so reported the President of the Board of Trade proposes a duty. It is that duty that we are discussing to-night. What makes this Resolution more important than any similar Resolution is that it is the first definite breach of the Prime Minister's pledge. It is a specific breach. He said "No duty without conditions fulfilled." The Government now say there is to be a duty; that is to say there is nothing left in the way of pledges to stand between us and a tariff.

I observe that the organiser of the Conservative party speaking at a meeting some days ago said every business man hoped that the Government would not flinch for one moment if they thought it right to extend the Safeguarding of Industries Act in any other direction they thought necessary. That is to say the pledges of the White Paper and the terms of the Act which bound the Government are gone. Were we right or wrong in the last election when we said that the return of this Government to power meant opening the door to a protective tariff? That is what we said, and it has proved to be true. The Government has caused the introduction of the duty in these circumstances, and the Report of the Committee is torn up and the pledges of the Prime Minister and the President of the Board of Trade are destroyed. We have come to a key position which must be resisted.

Brigadier-General Sir HENRY CROFT: Since this is a key position of Free Trade in this country, it is remarkable that is only eleven members of the Liberal Party in the House of Commons to defend it.

Question put, "That this House doth agree with the Committee in the Resolution, as amended."

The House divided: Ayes, 176; Noes, 45.

Division No. 158.]
AYES.
[2.37 a.m.


Acland-Troyte, Lieut.-Colonel
Barclay-Harvey, C. M.
Briggs, J. Harold


Albery, Irving James
Barnett, Major Sir Richard
Briscoe, Richard George


Alexander, Sir Wm. (Glasgow, Cent'l)
Barnston, Major Sir Harry
Brittain, Sir Harry


Allen, J. Sandeman (L'pool, W. Derby)
Beamish, Captain T. P. H.
Brocklebank, C. E. R.


Amery, Rt. Hon. Leopold C M. S.
Betterton, Henry B.
Brooke, Brigadier-General C. R. I.


Applin, Colonel R. V. K.
Boothby, R. J. G.
Broun-Lindsay, Major H.


Ashmead-Bartlett, E.
Bourne, Captain Robert Croft
Brown, Brig.-Gen. H. C.(Berks, Newb'y)


Astor, Maj. Hn. John J. (Kent, Dover)
Bowater, Sir T. Vansittart
Burman, J. B.


Baldwin, Rt. Hon. Stanley
Bowyer, Capt. G. E. W.
Butler, Sir Geoffrey


Balniel, Lord
Brassey, Sir Leonard
Campbell, E. T.


Chadwick, Sir Robert Burton
Hennessy, Major J. R. G.
Remer, J. R.


Christie, J. A.
Henniker-Hughan, Vice-Adm. Sir A.
Ruggles-Brise, Major E. A.


Churchill, Rt. Hon. Winston Spencer
Herbert, Dennis (Hertford, Watford)
Russell, Alexander West (Tynemouth)


Churchman, Sir Arthur C.
Herbert, S. (York, N. R., Scar. & Wh'by)
Rye, F. G.


Clayton, G. C.
Hilton, Cecil
Salmon, Major I.


Cobb, Sir Cyril
Hogg, Rt. Hon. Sir D. (St. Marylebone)
Samuel, A. M. (Surrey, Farnham)


Cochrane, Commander Hon. A. D.
Holbrook, Sir Arthur Richard
Samuel, Samuel (W'dsworth, Putney)


Cooper, A. Duff
Holland, Sir Arthur
Sandeman, A. Stewart


Cope, Major William
Holt, Capt. H. P.
Sanders, Sir Robert A.


Courtauld, Major J. S.
Hope, Capt. A. O. J. (Warw'k, Nun.)
Sassoon, Sir Philip Albert Gustave D


Courthope, Lieut.-Col. Sir George L.
Hopkins, J. W. W.
Shaw, Lt.-Col. A. D. Mcl. (Renfrew, W)


Croft, Brigadier-General Sir H.
Howard, Captain Hon. Donald
Shaw, R. G. (Yorks, W.R., Sowerby)


Crookshank, Col. C. de W. (Berwick)
Hudson, Capt. A. U. M. (Hackney, N.)
Shaw, Capt. W. W. (Wilts, Westb'y)


Crookshank, Cpt. H. (Lindsey, Gainsbro)
Hudson, R. S. (Cumberl'nd, Whiteh'n)
Shepperson, E. W.


Curzon, Captain Viscount
Inskip, Sir Thomas Walker H.
Skelton, A. N.


Dalkeith, Earl of
Jacob, A. E.
Slaney, Major P. Kenyon


Davidson, J. (Hertfd, Hemel Hempst'd)
Jephcott, A. R.
Smith, R.W. (Abcrd'n & Kinc'dine, C.)


Davies, A. V. (Lancaster, Royton)
Kidd, J. (Linlithgow)
Smith-Carington, Neville W.


Davies, Maj. Geo. F. (Somerset, Yeovil)
Lamb, J. Q.
Smithers, Waldron


Davies, Sir Thomas (Cirencester)
Lane-Fox, Lieut.-Col. George R.
Sprot, Sir Alexander


Dixey, A. C.
Lister, Cunliffe-, Rt. Hon. Sir Philip
Stanley, Lord (Fylde)


Drewe, C.
Little; Dr. E. Graham
Stanley, Col. Hon. G. F. (Will'sden, E.)


Eden, Captain Anthony
Loder, J. de V.
Sugden, Sir Wilfrid


Edmondson, Major A. J.
Lumley, L. R.
Tasker, Major R. Inigo


Elliot, Captain Walter E.
Macdonald, Capt. P. D. (I. of W.)
Templeton, W. P.


Evans, Captain A. (Cardiff, South)
Macdonald, R. (Glasgow, Cathcart)
Thompson, Luke (Sunderland)


Everard, W. Lindsay
Macintyre, Ian
Thomson, F. C. (Aberdeen, South)


Fairfax, Captain J. G.
McLean, Major A.
Thomson, Sir W. Mitchell- (Croydon, S.)


Fanshawe, Commander G. D.
MacRobert, Alexander M.
Tinne, J. A.


Fermoy, Lord
Manningham-Buller, Sir Mervyn
Titchfield, Major the Marquess of


Fleming, D. P.
Margesson, Captain D.
Tryon, Rt. Hon. George Clement


Ford P. J.
Mason, Lieut.-Col. Glyn K.
Ward. Lt.-Col. A. L. (Kingston-on-Hull)


Forestier-Walker, L.
Mitchell, S. (Lanark, Lanark)
Warner, Brigadier-General W. W.


Foxcroft, Captain C. T.
Mitchell, W. Foot (Saffron Walden)
Warrender, Sir Victor


Gadie, Lieut.-Col. Anthony
Moore-Brabazon, Lieut.-Col. J. T. C.
Waterhouse, Captain Charles


Ganzoni, Sir John
Morrison-Bell, Sir Arthur Clive
Watson, Sir F. (Pudsey and Otley)


Gates, Percy
Nail, Lieut.-Colonel Sir Joseph
Wells, S. R.


Gilmour, Lt.-Col. Rt. Hon. Sir John
Nelson, Sir Frank
Wheler, Major Sir Granville C. H.


Goff, Sir Park
Nuttall, Ellis
Williams, Com. C. (Devon, Torquay)


Grant, J. A.
O'Connor, T. J. (Bedford, Luton)
Williams, Herbert G. (Reading)


Greene, W. P. Crawford
Oakley, T.
Wilson, Sir C. H. (Leeds, Central)


Hacking, Captain Douglas H.
Pennefather, Sir John
Winterton, Rt. Hon. Earl


Hall, Capt. W. D'A. (Brecon & Rad.)
Percy, Lord Eustace (Hastings)
Wise, Sir Fredric


Hanbury, C.
Peto, G. (Somerset, Frome)
Wood, B. C. (Somerset, Bridgwater)


Harrison, G. J. C.
Pielou, D. P.
Wood, E. (Chest'r, Stalyb'dge & Hyde)


Hartington, Marquess of
Preston, William
Woodcock, Colonel H. C.


Harvey, G. (Lambeth, Kennington)
Price, Major C. W. M.



Harvey, Major S. E. (Devon, Totnes)
Radford, E. A.
TELLERS FOR THE AYES.—


Hawke, John Anthony
Ramsden, E.
Commander Eyres Monsell and


Henderson, Capt. R. R. (Oxf'd, Henley)
Reid, Capt. A. S. C. (Warrington)
Colonel Gibbs.


NOES.


Adamson, Rt. Hon. W. (Fife, West)
Henderson, T. (Glasgow)
Smith, Ben (Bermondsey, Rotherhithe)


Adamson, W. M. (Staff., Cannock)
Hirst, G. H.
Sutton, J. E.


Ammon, Charles George
Hirst, W. (Bradford, South)
Thomas, Sir Robert John (Anglesey)


Barr, J.
Hudson, J. H. (Huddersfield)
Thomson, Trevelyan (Middlesbro. W.)


Benn, Captain Wedgwood (Leith)
John, William (Rhondda, West)
Tinker, John Joseph


Cowan, D. M. (Scottish Universities)
Jones, Henry Haydn (Merioneth)
Warne, G. H.


Crawfurd, H. E.
Jones, J. J. (West Ham, Silvertown)
Watson, W. M. (Dunfermline)


Dalton, Hugh
Kelly, W. T.
Watts-Morgan, Lt.-Col. D. (Rhondda)


Day, Colonel Harry
Lawson, John James
Welsh, J. C.


Edwards C. (Monmouth, Bedwellty)
Morris, R. H.
Westwood, J.


Fenby, T. D.
Murnin, H.
Williams, C. P. (Denbigh, Wrexham)


Garro-Jones, Captain G. M.
Parkinson, John Allen (Wigan)
Windsor, Walter


Graham, D. M. (Lanark, Hamilton)
Pethick-Lawrence, F. W.



Grundy, T. W.
Potts, John S.
TELLERS FOR THE NOES.—


Hall, F. (York, W. R., Normanton)
Robinson, W. C. (Yorks, W. R., Elland)
Sir Godfrey Collins and Sir Robert


Harris, Percy A.
Slesser, Sir Henry H.
Hutchison.


Henderson, Rt. Hon. A. (Burnley)

Ordered, That it be an Instruction to the Committee on the Finance Bill that they have power to make provision therein pursuant to the said Resolution, as amended.

Orders of the Day — MERCHANDISE MARKS ACTS (1887 TO 1911) AMENDMENT BILL.

Read a Second time, and committed to a Standing Committee.

The remaining Orders were read, and postponed.

It being after half-past Eleven of the Clock upon Monday evening, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at Fourteen Minutes before Three o'Clock a.m.